The financial situation of the United States is looking pretty dismal of late. The stock market has taken its second nosedive in several years, unemployment figures have not improved, and people are looking for relief from their economic woes. Some have gotten to the point where they are considering bankruptcy. In cities like Chicago, Chapter 13 bankruptcies are on the rise, and even in suburbs like North Riverside, chapter 13 filings are increasing as well. It is one way for businesses and individuals to get relief from the constant hounding of collection agencies.

Two questions must be asked before deciding what type of bankruptcy you want to pursue. Do you want to eliminate your debt without paying it off because you do not think that paying it off is possible? Or, do you want to extend the time for repayment and get your creditors off you back so you can have time to satisfy your debts?

If you are not familiar with this type of bankruptcy, it is different from Chapter 7 in that rather than wiping out the debt as in Chapter 7, there is a restructuring of debt. If it is an individual doing the filing, it allows that person to retain their assets, and it provides the relief from collectors needed for a period of several years in order that the individual can get back in good standing financially. In either type of bankruptcy, the individual is required to file a petition, or declaration in the local court. This is a complicated document, and it is therefore highly recommended that a bankruptcy attorney be retained. A specialized attorney who deals with the bankruptcy courts on a daily basis has the resources to handle the case much easier than an individual with no prior court experience.

After filing the initial petition, it would be the job of the attorney to write a proposal for repayment of the outstanding debts. The proposal should be detailed and complete, including all debts to credit cards, banks, and any other businesses and institutions. It is important that the plan drawn up by the attorney is feasible and can be carried out by the debtor.

If accepted, the plan would be monitored by the court. Since the court is overseeing the disposition of the bankruptcy plan, it is important that the individual, or debtor, communicate through the court. The creditors are also required to work through the court. They should not contact the debtor once the plan is in place. This structure takes the stress off both the debtor and creditor, allowing them the time needed to satisfy the requirements of the plan.

In addition to keeping their necessary assets, another benefit of this type of bankruptcy is the credit reports. Whereas a Chapter 7 bankruptcy remains on the credit report for seven years, this type only remains on the credit report for five years. It is an option to consider and maintain your status quo, which simply means that your life will look the same as it always has as you work toward financial freedom.

Author Bio: Stewart Wrighter searched the term Chicago chapter 13 while doing some research for a university class. He searched the term north Riverside chapter 13 to learn more about it.

Category: Legal
Keywords: Chicago chapter 13,North Riverside chapter 13