Some Advantages of Filing for Chapter 13 Bankruptcy in Aurora

by | Mar 4, 2014 | Lawyers

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Many people are aware that it’s possible to declare Bankruptcy in Aurora if they have become overwhelmed with debt. They may not realize, however, that a form of bankruptcy is available that allows them to pay off their obligations over time. Chapter 13 bankruptcy is often an appealing option to individuals who never intended to allow their finances to get so out of control. They may have run up credit cards during a difficult time, such as after the loss of a job, a long-term layoff, an illness or emergency expenses. They might have financed a vehicle right before their employer closed the business, or they may have fallen behind on mortgage payments and never have been able to catch up.

A person who is interested in filing Chapter 13 Bankruptcy in Aurora may want to schedule an appointment for a free consultation with a law firm such as Ledford and Wu, which serves the Chicago area and helps individuals and business owners get back on track financially. Chapter 7 bankruptcy is a liquidation process in which the individual will need to sacrifice some of his assets to pay his debt, while the rest of his debt is essentially eliminated. Chapter 13, in contrast, is a reorganization and debt consolidation program. Because the person will need to adhere to a payment schedule, he must have a regular income to make those payments.

The lawyer will assist the client in working up a proposal for a payment plan that will cover the amounts he needs to pay to fulfill his obligations within five years maximum. The advantage to the creditors is that they receive payment for the amount due at that point in time, although they forfeit future interest that they might otherwise charge. This is a better situation for them than Chapter 7, in which they might not recover any of the money owed. The individual may also be able to stop impending foreclosure on his property if he can manage regular monthly mortgage payments as well as payments to resolve the past-due amounts within the Chapter 13 payment proposal.

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