There are different options for Illinois residents who wish to pursue personal bankruptcy. The two forms of bankruptcy that individuals may choose from are Chapter 7 bankruptcy and Chapter 13 bankruptcy. For individuals who choose and qualify for Chapter 7 bankruptcy, liquidation is a part of the repayment process.
Liquidation happens when a person sells off items of property. This may sound like a scary process, but liquidation is not an all-out sale of a person’s assets. Liquidation is controlled and limited by exemptions and the law and a bankruptcy attorney can assist their client with understanding these legal elements.
What is sold during Chapter 7 bankruptcy?
To understand what must be sold to satisfy debts through Chapter 7 bankruptcy, it may be easier for readers to understand what is protected from sale through exemptions. Generally, debtors who use Chapter 7 bankruptcy may exempt specific items of property such as their homes, vehicles, and other items that are necessary for their continued livelihood. Because it is necessary for individuals who file for bankruptcy to continue living after their debts are discharged, those who use Chapter 7 bankruptcy may keep some of the items they need to live on once their bankruptcies are over.
Liquidation of other property
As stated, a person may be able to keep their home safe from liquidation, but they may have to sell a second home or vacation property in order to satisfy their debts. Similarly, an individual who owns multiple vehicles may only be allowed to keep one so that they can drive once their discharge is granted. Property that is liquidated in Chapter 7 bankruptcy is not necessarily superfluous but is generally property that is not needed for the livelihood of the individual.
Liquidation through Chapter 7 bankruptcy is a controlled process. It can be overwhelming for debtors who choose this path to solvency, but it also affords individuals great opportunities to get out from under their overwhelming debts. Those who file for Chapter 7 bankruptcy do not have to pursue their discharges alone. They may seek the help and counsel of trusted bankruptcy attorneys in their communities.