What Is A Chapter 13 Bankruptcy?
July 23, 2020
A chapter 13 is a form of a repayment plan. Certain debts have to be paid 100%. Other debts like credit cards can generally be repaid at a fraction of the amount due, such as maybe just 10%.
WHAT ARE THE REQUIREMENTS TO FILE FOR A CHAPTER 13 BANKRUPTCY?
In addition to the requirements for a chapter 7, a client must be able to demonstrate that he or she can make the chapter 13 payments and in most cases, demonstrate that he or she is devoting all of their income for the next 3 years to the chapter 13 plan.
WHAT KIND OF DEBT TYPICALLY IS DISCHARGED IN A CHAPTER 13?
Almost all the listed debts are dischargeable in a chapter 13, but payments must also be made.
WHAT DEBT IS NOT FORGIVEN IN A CHAPTER 13 BANKRUPTCY?
The debts that are not discharged in a chapter 13 are student loans but there will be no collection outside the chapter 13 while the chapter 13 is in force. Child support arrears are not dischargeable unless paid in full, and the balance of one’s mortgage is not dischargeable if you choose to keep your house.
WHAT AM I ABLE TO KEEP IN A CHAPTER 13 BANKRUPTCY?
Generally, you’ll be able to keep everything in a chapter 13.
WHAT ARE THE DIFFERENCES BETWEEN CHAPTER 7 AND CHAPTER 13 BANKRUPTCY?
Both are designed to give a person a discharge of listed debts but in a chapter 13, one can repay his or her car loans even if one is behind. Also a chapter 13 allows one to catch up on back mortgage payments even if a foreclosure has been filed. Back taxes can be paid through a chapter 13 and that includes real estate taxes that have been sold if the case is filed before the last date of redemption of the tax sale.
HOW DO I KNOW WHICH BANKRUPTCY IS BEST SUITED FOR ME?
The individual’s best option is to start with a comprehensive listing all of one’s debts and assets as well as listing one’s income and expenses, then determining what one’s objective is. Some people have a car as a need and they decide to file a chapter 13. Someone may decide to have an older car with a high balance due on the loan and decide to give up the car, so they file a chapter 7. If one has mortgage arrears and wishes to keep their house, a chapter 13 is the more appropriate chapter so they can catch up on their house payments.
HOW LONG DOES IT TAKE SOMEONE TO GO THROUGH THE BANKRUPTCY PROCESS?
Chapter 7 versus chapter 13, the chapter 7 process is generally completed in about 4 months from the date of filing. Most chapter 13s run 3 to 5 years.
ADDITIONAL INFORMATION ABOUT BANKRUPTCY IN ILLINOIS
One is best advised by a lawyer who has concentrated their practice in consumer bankruptcy. Many people who have filed the case on their own without an attorney get in a world of problems.
For more information on Chapter 13 Bankruptcy In Illinois, a Complimentary initial consultation is your next best step. Get the information and legal answers you are seeking by calling today.