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What is bankruptcy protection?

When an individual, couple or business is unable to maintain the payments for debt, they may apply for bankruptcy protection under the bankruptcy laws of the United States. For the individual or couple, the results of declaring bankruptcy may be the cancellation of almost all debt they carry, this goes along with disposing of most assets or the development of a structured plan approved by the court to repay the debts over time. When a business declares bankruptcy it either goes out of business, closing the doors or the business can stay functional under an agreed upon repayment plan.

The two most common forms of bankruptcy in Naperville that are used by individuals and couples are Chapters 7 and 13. The word “chapter” refers to the section of the bankruptcy code that sets the rules. Chapter 7 is the most common and is often simply called Liquidation or even straight bankruptcy. In this case the court appoints a trustee who is put in control of whatever assets there are, the trustee then liquidates these assets and applies the money to the outstanding debt to the extent possible. If the primary residence and vehicle are either clear of debt or payments are up to date these assets are not included in what is disposed of.

Chapter 13 bankruptcy in Naperville is usually used by people who are gainfully employed with significant assets. In this case these people will have gotten themselves into debt which they cannot pay as agreed. The court oversees the development of a repayment plan that runs over a period of time, usually three years but never exceeding five. While the individual is in Chapter 13 he or she is protected from creditors who may wish to collect on their outstanding debt or seize the assets in question. The creditors must abide by the approved repayment plan.

Businesses can go into bankruptcy the same as couples and individuals, they can claim for Chapter 7 protection which has been discussed or Chapter 11 which is a reorganization of the business. As in Chapter 13 for individuals, Chapter 11 for businesses demands that a repayment plan be drawn up and the debts be repaid in an agreed amount of time. If the business is public, the stock can no longer be traded as in many cases the value falls to zero.

If you are a couple, an individual or a business and your debts are no longer manageable you may be looking to declare bankruptcy in Naperville as the solution. You are invited to contact the law offices of Trepeck Law Group, LLC; Chicago Debt Solutions. To see their business reviews visit BBB page.

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