Are you an individual who is suffering from mounting debt that you cannot afford? You may want to consider filing for chapter 13 bankruptcy. This form of bankruptcy is best suited for an individual who has a consistent job but still cannot afford to pay their bills in full.
Chapter 13 Bankruptcy allows a debtor to make payments on outstanding debt over a period of up to 60 months. The Chapter 13 Bankruptcy process requires completion of various schedules and petitions, and thus it can be a complex procedure. Therefore, it is important to choose a bankruptcy attorney in Joliet who has the experience, compassion, and work ethic to see you through the process.
Why Chapter 13 Bankruptcy Over Another Debt Consolidation Plan?
The problem with many debt consolidation companies is that their attempts to negotiate with your creditors or offer settlements can ultimately be rejected by creditors. However, with Chapter 13 bankruptcy, once a plan is confirmed, creditors will be required by federal law to accept payments according to the terms of the plan or not get paid at all. In fact, in most cases, Chapter 13 will stop all interest on unsecured debt.
Chapter 13 Bankruptcy vs. Chapter 7
The primary difference is between these two forms of bankruptcy is simply the inclusion of a repayment plan with Chapter 13 Bankruptcy. This repayment plan generally commits your disposable income to regularly scheduled payments over a 3-5 year period.
Why File for Chapter 13 Bankruptcy?
- Income is Too High: Some people also file for Chapter 13 Bankruptcy in Joliet because they have too much income to qualify for a Chapter 7 Bankruptcy filing.
- Previous Chapter 7 Filing: If you have filed a Chapter 7 Bankruptcy in the preceding eight years, you are not eligible to file again. Chapter 13 Bankruptcy is your only option.
- Protection from Creditor Harassment: Chapter 13 also provides you protection from those creditors that are in the plan. In most cases, they cannot seek payments from you outside of the bankruptcy or may be subject to fines and penalties if they do.
- Stop Foreclosures and Repossessions: If you are struggling financially after a divorce, the loss of job, or an illness you may be have fallen behind mortgage or car payments. Chapter 13 Bankruptcy can help you keep your property while managing a more affordable payment plan.
- Too Many Assets: For people who have too much equity in their home, or have assets that exceed protected amounts, Chapter 13 may allow you to keep your assets and pay your debts back through a consolidation bankruptcy.
An experienced Illinois bankruptcy attorney is your best resource for determining whether you should file for Chapter 13 Bankruptcy in Joliet.
How Does Chapter 13 Bankruptcy Work?
- The bankruptcy attorney files Chapter 13 Bankruptcy plan when the bankruptcy petition is filed. The plan will propose to pay a certain amount of money per month to the Chapter 13 trustee, based on the debtor's income and certain allowable expenses.
- Creditors review the plan and offer objections.
- Chapter 13 Bankruptcy plan is confirmed and trustee begins collecting payments from the debtor and distributing funds to creditors according to the plan.
- When all payments are made and disbursed to creditors according to the plan, a discharge will be issued eliminating any remaining unsecured debt.
What Else Should I Know About Chapter 13 Bankruptcy?
- Most critically you must be working or have a consistent source of income for your repayment plan to be approved by the court for chapter 13 bankruptcy.
- You must be able to pay for both your monthly living expenses and have ability to make payments to your trustee over a 3-5 year period. If payments are not made to the trustee in a timely manner, your case may be dismissed.
- If mortgage payments are not kept up to date, your mortgage lender may ask to be removed from the bankruptcy and attempt to collect the debt outside the bankruptcy case.
- If tax payments are not maintained on your property, or if insurance is not maintained on any homes or vehicles, those creditors may ask to be removed from the bankruptcy and may be allowed to collect the debt while the bankruptcy case is still open.
Reasonable Fees for Chapter 13 Bankruptcy Filing in Illinois
While filing and completing a Chapter 13 Bankruptcy can be a complex task, the attorneys at Chang & Carlin, LLP can help you successfully navigate the entire process. Additionally, Chang & Carlin has 5 convenient locations in the Joliet Illinois area (Schaumburg, Chicago, Warrenville, Waukegan, Joliet), and can assist you through this difficult time. Let us work with you to determine what your options are and create a road map to your new debt-free life!