Bankruptcy lawyers in Lake County know just how stressful it can be when declaring bankruptcy is your only choice. But even beyond the matter of your personal financial hardship, the legal process of bankruptcy is quite complicated and stressful. So, if you want to get some peace of mind so you can think rationally during such a tough time, it’ll help to know what happens after you declare bankruptcy.
To help you understand the process, we’ll review the events immediately following your declaration of bankruptcy. That way, you and your lawyer can make big financial decisions when it really matters.
We’re focusing on two types of bankruptcy in this post—Chapter 7 and Chapter 11.
A “Simple” Chapter 7
No bankruptcy is simple, but Chapter 7 is the simplest way to declare bankruptcy. Once you’ve declared a Chapter 7 bankruptcy, you will have to liquidate all your assets except the ones that state law determines you may keep. A trustee will sell the rest of your assets to pay as many debts as possible.
Additionally, after you’ve declared bankruptcy, you will no longer be liable to be sued by your existing creditors. The Illinois Attorney General notes that Chapter 7 bankruptcy is the fastest, easiest way to settle debts. But that doesn’t mean you won’t need a bankruptcy lawyer in Lake County to ensure everything goes smoothly.
The Chapter 11
Declaring bankruptcy this way allows the debtor to “reorganize” their assets. Again, declaring this type of bankruptcy will protect you from lawsuits stemming from your existing debts. But a Chapter 11 is more complicated in that you, or your bankruptcy lawyer in Lake County, will have to negotiate with the court to create a payment plan.
Once the payment plan has been negotiated, you (or your business) will be forgiven for any previous debts (with some limitations). Unlike a Chapter 7, in a Chapter 11 bankruptcy, you can maintain control of your assets. This may sound appealing, but you’ll ultimately be at the mercy of the court when it comes to repayment so the financial burden could end up being crippling.
That is unless you hire an experienced bankruptcy lawyer in Lake County from the Burns Law Firm P.C. You can call us today at (847)782-1300 to request a free consultation. Or learn more about us and how we could help you by browsing the rest of our website.