Chapter 13 is a type of bankruptcy case that allows you to pay some
or all of your debts to your creditors. You propose a plan for
repayment which commits your disposable income to the plan. If the
plan complies with the law and is acceptable to the court, you make monthly payments for up to 60
months. Common uses of Chapter 13 are to get caught up on past due
home mortgages or car loans. Your Free No
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Learn what Chapter
13 can do for you
How Chapter 13 Works In a Nutshell:
Chapter 13 bankruptcy starts with a thorough review
and consultation regarding your debt situation. You make a list of
your debts, your assets (your home, cars, personal items, etc.) and
provide information regarding your income.
Some people who make too much money to qualify for Chapter 7 are
required to file Chapter 13 if they want bankruptcy relief. Thus, a
thorough examination of all of your income is important. If your
monthly expenses exceed your income, you could be disqualified from
Chapter 13 because your income is too low. Careful analysis is the key
to a successful Chapter 13.
A typical use of Chapter 13 might be a person who is facing
foreclosure. Perhaps they were unemployed for a time and got behind on
the mortgage. But now they are back to work and have enough money to
pay the mortgage as it comes due. If they have more income than
expenses, then that "diposable income" can be committed to a Chapter 13
Plan. The Plan can pay back the mortgage arrears and keep you in your
home.
Once you have all of your information ready, a Chapter 13 petition
is prepared. As with all bankruptcy cases, you will have to complete
"credit counseling" before you can file your case. That is usually a
short one hour or less process after which you get a certificate. When
ready, you case can be filed and most creditor collection actions must
cease.
Your case gets assigned to a Chapter 13 Trustee who reviews your
plan and bankruptcy documents. Their job is to make sure your plan
complies with the Bankruptcy Code and is a feasible plan for
repayment. If the Trustee agrees that your case is viable, then it
goes before the court for confirmation. Once confirmed you continue to
make your payments to the Chapter 13 Trustee until the end of the plan.
Chapter 13 is both simple to describe yet complex to execute.
Problems can arise when creditors don't receive their monthly payments
or you fail to pay the Chapter 13 Trustee. Having the legal advice of
an attorney is very important.
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Location: From
our office in Glen Ellyn, Illinois, we proudly serve DuPage, Kane, Will
and Cook Counties, including: Naperville, Wheaton, Lombard, Downers
Grove, Hinsdale, Lisle, Carol Stream, Downers Grove, Westmont,
Elmhurst, Addison, Darien, and many others. We are your local source
for bankruptcy law.
Disclaimer: The information on this website is provided as
general information only. It is not a substitute for legal advice from
a licensed lawyer. You should consult with an attorney if you are
considering bankruptcy. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.