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PERSONAL BANKRUPTCY:
Chapter 13 Overview
If you have a job or some source of regular income, but are overwhelmed by debts you can’t handle, Chapter 13 bankruptcy may be right for you. You can use Chapter 13 bankruptcy to liquidate many of your debts, set up a reasonable debt repayment plan, and get a fresh financial start.
Chapter 13 is a personal reorganization where you make payments over a three to five year period to a trustee. The trustee in turn pays your creditors.
The amount of your monthly payment is usually determined by taking your monthly income (less taxes) and subtracting your necessary living expenses and providing that what is left over (disposable income) will be paid to the bankruptcy trustee for a set period of time.
Chapter 13 is particularly useful for people who are in or facing foreclosure and want to keep their home. Chapter 13 allows you up to five years to catch up on our back mortgage payments by making monthly payments to the trustee while maintaining your current mortgage payments.
A typical Chapter 13 Plan pays unsecured creditors approximately 10% of what they are owed.
The Process
Once you have provided us with all the required information, we will schedule an appointment with one of our attorneys. At that appointment you and your attorney will complete all the necessary bankruptcy papers and sign them. Remember, you are signing under oath and penalty of perjury so be sure to revew them for accuracy.
Once your papers are signed we will file them with the bankruptcy court and the automatic stay will go into effect and you will be protected by the bankruptcy court.
Before your discharge is approved, you must receive financial education
Once your case is filed and you have your case number, you should complete the course in personal financial management. This course is the second credit counseling and is very important. You should be sure to provide us with your certificate of completion because we must file it with the court in order for you to receive your discharge.
The centerpiece of your Chapter 13 bankruptcy is your "Plan"
Your repayment plan is an agreement between you and your creditors. Your creditors agree to forgive a portion of you debts to them in exchange for your commitment to repay your reduced debts over time. Most plans require you to make monthly payments to the bankruptcy trustee. The trustee will make distributions to your creditors. Typically, your repayemnt plan will last from three to five years. While you are making your payments under your plan, your creditors cannot take any collection actions against you, and they are required by law to abide by the terms of your Plan.
About one month after your case is filed, you will attend a meeting with a bankruptcy trustee called a "341 meeting" or "first meeting of creditors". This is a strange name because it is the only meeting and creditors rarely attend. At this first meeting of creditors you will be asked a series of standard questions about your assets and liabilities. Don't worry we will be with you at the meeting and you will be carefully briefed on what questions to expect.
Your Chapter 13 Plan payments begin 30 days after your case is filed. This is very important. Some people have the misconception that payments don't begin until we have seen the trustee - not true!
Approximately one month after your meeting of creditors the trustee and I go to court and explain your plan to the judge. If everything is in order the judge will "confirm" your plan and everyone is bound by its terms. You simply make your payments for the term of the plan and at the end any dischargeable debts are discharged and you will be current on your mortgage.
 
WHAT WE DO
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| We have the knowledge and resources to handle any bankruptcy matter from a simple Chapter 7 to a complex Chapter 11 or workout. |
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read more FAQ about Chapter 13 Bankruptcy in Illinois>
read more about Chapter 7 Bankruptcy in Illinois>