Please Help Me

What is the name of your state? Illinois

My husband had been unemployed for about 1 year now (he's looking for a job but can not find one) and I have a small business (S Corp) that had been losing money for 2 years now. We have debts close to $70,000 (combination of unsecured credit cards and car loans).

We have 2 young daughters (ages 5 and 7) and we have a house that's yet to be paid for.

My husband and I are trying our best to pay the bills with our life savings but we since exhausted all of our life savings, including our 401K and other retirement accounts. As of the moment, we have no money in the bank, no retirement plans, no medical insurance and lots of debts that are behind in payments by about 3 months now. What we have left is an unpaid house and 2 cars (one is about 3 years to go before paid and the other is about 1 year to go) and regular household personal property.

As hard as it is to accept it, I don't believe that we have any other option but bankruptcy. Can someone please explain to me about Chapter 7, 11 and 13. And which one of these are better for us.

Will we lose our house, cars and other personal property? Another thing that my husband and I are losing sleep over is our children, can they take them away from us?

I know that this seems like a coward way of escaping this problem. But please if someone could help me, I really would appreciate it.

[JETX]

"Can someone please explain to me about Chapter 7, 11 and 13."
*** Chapter 7 is a liquidation of assets and used to pay off or discharge the debt. Chapter 13 is a 'reorganization' where you get to keep some assets... and agree to make payments to a fund used to pay the creditors a percentage of the debt over a period of time (usually 3 to 5 years) A chapter 11 is a reorganization plan for corporations.

"And which one of these are better for us."
*** On the surface, it sounds like a chapter 7, but in order to determine the correct filing, if at all, would require a thorough review of your assets and liabilities.

"Will we lose our house, cars and other personal property?"
In either bankruptcy, you will lose some property.... and take a major credit hit for the next 10 years. There is no such bankruptcy as "I keep everything and all debts are discharged".

"Another thing that my husband and I are losing sleep over is our children, can they take them away from us?"
*** No. Your parental rights have no relationship to your financial status.

"I know that this seems like a coward way of escaping this problem. But please if someone could help me, I really would appreciate it."
*** You need to go to the local library or bookstore (and online) and try to get as much information as you can about bankruptcy and the process it involves. Then, you need to get hold of a local 'bankruptcy attorney' and try to get a free or low cost 'consultation'.
To get you started on the web, you can look at the following:
[url]http://www.illinoisbankruptcy.com/[/url]
[url]http://www.chapter7bankruptcylaw.com/chapter_7_bankruptcy.html[/url]
[url]http://www.chapter7bankruptcylaw.com/chapter_13_bankruptcy.html[/url]
[url]http://illinoisbankruptcylawyer.com/[/url]
[url]http://www.illinoisbankruptcy.com/7v13.html[/url]
[url]http://www.google.com/search?hl=en&lr=&ie=UTF-8&oe=UTF-8&q=Illinois+bankruptcy[/url]

[HomeGuru]

If the BK laws allowed Trustees to take kids away, more people would be filing.

thats f'd up, but true.. hah