What is Chapter 7?

Joliet Illinois Bankruptcy Lawyers & Attorneys

Dave Siegel: Hello. My name is Dave Siegel. Thanks for joining us. Today we�re going to be talking about Chapter 7 bankruptcy and getting out of debt. I�m joined by my co-host Jesse Barrientes. Jesse, welcome.

Jesse Barrientes: Thanks Dave.

Dave Siegel: How are things?

Jesse Barrientes: Everything is great. We�ve got a nice fire here for our show and we�re ready to go.

Dave Siegel: Well, Chapter 7 is the topic. Let�s dive right in. What do you want to know about Chapter 7 in a nutshell?

Jesse Barrientes: Well, first, do I need a Chapter 7? Because you know what? I see some of these commercials and some of these advertisements in Joliet that tell me that I can do debt consolidation and I can just pay them a certain amount of money and they�re going to take off the interest and they�re going to negotiate and stand up for me � and it�s going to save my credit. It�s better than a Chapter 7.

Dave Siegel: Well Chapter 7 is a great way to get out of debt if you have a ton of unsecured debt and you don�t have significant assets. A lot of the places that you�re mentioning are people who are trying to hone in on people who have debt � not necessarily get them out to debt but to extract a little bit of money out of them as they�re going down. Most people are not successful in a debt reorganization plan you see that does not involve bankruptcy because it just doesn�t have any strength to it. It�s like a voluntary payment plan that the creditors can either accept or not. Some can accept it while others are actually suing the person and garnishing wages. So really it doesn�t have a lot of strength. Where bankruptcy does.

Jesse Barrientes: So even if I pay my money to this place and � you know, I mean I assume that they�re working with the creditors.

Dave Siegel: Well, they�re trying to. And they probably have some credits in their back pocket that are willing to work with them, but they�re never going to get all of them to work with them. And that�s the problem. Another problem is a lot of these debt collection reorganization firms collect all the funds up front before they turn it over to the creditor. So the creditor is basically waiting for a big lump sum payment of a percentage of the debt and they�re not getting dribs and drabs and steady payments each month. So at some point they lose the incentive to work out this deal and they want to pursue with collection efforts.