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What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

There are a lot of differences between Chapter 7 and Chapter 13 bankruptcy. You need to know these differences before you file for bankruptcy – depending on your circumstances, you might only be eligible for Chapter 13 bankruptcy. Even if you are not limited to this type, it might be a better choice for you than Chapter 7. Talk to an experienced bankruptcy attorney about the differences between Chapter 7 and Chapter 13 bankruptcy to determine which type is best for your situation. Your attorney can also explain the bankruptcy process to you in detail and guide you through each step, advising you as you work to regain control of your finances.

Chapter 13 and Chapter 7 bankruptcy are both designed for individuals who have more personal debt than they can realistically repay. Personal debt refers to credit card debt, medical debt, and in some cases, small business debt. Other types of bankruptcy include Chapter 11, Chapter 12, and Chapter 9. These are meant for businesses, family farmers and fishermen, and municipalities, respectively.

You Have to Qualify to File for Chapter 7 Bankruptcy

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Tagged in: Bankruptcy Debt
Illinois' Next High-Profile Bankruptcy Case: Chicago Public Schools?

It looks like Chicago Public Schools are headed toward bankruptcy if Illinois General Assembly member Ron Sandack (R-Downers Grove) has his way. Whenever an individual, a company, or in this case a school system considers filing for bankruptcy, it is best served by working with an experienced bankruptcy attorney.

Chicago School System's Debt Dilemma

The school system, the third-largest in the country, is currently facing a $1.1 billion budget deficit. The primary cause of this deficit is the $634 million payment it owes to its employees' pension fund. Rather than raising taxes to meet this looming expense, Sandack feels that allowing the district to declare Chapter 9 bankruptcy is a more affordable solution for the city's taxpayers to fix the school system's debt problem. Chapter 9 bankruptcy can not be declared without special legislation to allow it. If the General Assembly does not pass Sandack's bill, the school system can not declare Chapter 9 bankruptcy. The Chicago Teachers Union is pushing back against the legislation.

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Illinois Suburbs Poised for Bankruptcy Under House Bill 298

House Bill 298 is currently making its way through the Illinois state legislature. If it passes, municipalities in Illinois will be able to file for Chapter 9 bankruptcy.

Chapter 9 bankruptcy is the type of bankruptcy that is reserved for municipalities that can not cover their debts. It is only available for struggling municipalities. For individuals struggling with personal debt, Chapter 7 and Chapter 13 bankruptcy are ways to regain control of their financial lives. For business owners, Chapter 11 and Chapter 13 bankruptcy can be viable options. Another type, Chapter 12, exists for farmers and fishermen who survive on seasonal incomes. To learn more about the types of bankruptcy that exist and those that may be available for you, work with an experienced bankruptcy attorney.

Which Municipalities May File for Chapter 9 if House Bill 298 Passes?

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Posted on in Bankruptcy
What is a Strategic Default?

At first, the term “strategic default” might sound like an oxymoron. You know that defaulting on your loan is a bad thing. Or at least, you have been taught to believe it is a bad thing. But sometimes, it actually makes financial sense to default on your loan.

The first question to ask yourself when you are considering a strategic default is whether the value of your property is higher or lower than the amount of money you owe on your loan. If the property is worth less than you owe, you have what is known as “negative equity.” Having negative equity does not necessarily mean that a strategic default is your best option, but it can.

Why Should I Choose a Strategic Default?

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I Can Not Pay My Debt, but I Do Not Want to File for Bankruptcy

When you are facing a significant amount of personal debt, the options you have depend largely on your individual circumstances. Filing for bankruptcy is a deeply personal decision that will affect your credit and other areas of your financial life for years after filing. Work with an experienced bankruptcy attorney to determine your options before you make this decision.

You might be able to take control of your debt through an alternate measure, such as one of the following:

Debt Negotiation

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