By Legal Helpers

Since federal law governs bankruptcy, it does not matter where someone lives, the procedures will all be the same. If a person live for example in Illinois bankruptcy proceedings will be the same as those living in California. An attorney is always recommended for those contemplating going through the process, as they can make sure the petitioner qualifies for the type of bankruptcy for which they file.

Even as the changes in the bankruptcy code affected filings across the nation, for those filing for bankruptcy relief in the Windy City the timed release from debt is sometimes a bitter pill. Seeing many Chapter 7 applications switched over to a Chapter 13 debt adjustment instead, there is some question as to whether filing for Chapter 13 Chicago debtors seek timed release or are simply doing the best they can with what is offered to them.


The fresh start that used to be the hallmark of a bankruptcy filing is not open to such debtors, yet at the same time they do not stand to lose their homes and assets either. Even if they are behind in mortgage payments, they will still have the option of curing that deficit and thus holding on to the family home, offering stability to their families rather than the fire sale of the primary residence that will result in having to move into a potentially less desirable neighborhood and home.

The biggest selling point Chapter 13 Chicagoans realize is the fact that debts may be restructured to suit the needs of the payer, not the payee. In addition to the foregoing, remember that a Chapter 13 filing – although negative on the credit report – will not be as bad on paper as a Chapter 7 filing. Sure, you are stuck making payments, but all in all you can point to the good faith effort you have made at meeting your financial obligations. Additionally, the extra time that you buy by filing for this bankruptcy protection is often enough to ensure that your family is not forced to involuntarily relocate to a neighborhood or home that does not fit your needs.

There are two types of personal bankruptcy, Chapter 7 and Chapter 13 that offer debtors protection from unruly creditors or collectors. There may some key points about the person’s state of residence that is pertinent to filing bankruptcy, even though it is a federal court procedure. There are exemption limits to some personal possessions, meaning that the petitioner can protect certain assets from liquidation. Depending on length of residency in Illinois bankruptcy attorneys can help determine if they should use state exemptions or federal exemptions.

When contemplating bankruptcy an experienced attorney can help debtors sift through the paperwork quickly and easily and make sure that everything the petitioners puts into their petition is true and accurate. Today’s bankruptcy judges will hold attorneys responsible for false statements made by the petitioner they represent to make sure that the debtor and creditor are both treated fairly under the new laws.

Additionally, persons petitioning the courts for protection under federal bankruptcy laws will have to attend counseling sessions from firms approved by the court to help keep them financially healthy in the future. By preventing repeated bankruptcy not only are the credit companies made more healthy, but the debtor learns to be more responsible with their credit.

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