Chapter 13 Bankruptcy Lawyer Forrest Ingram-Chicago Illinois

Chicago Illinois Chapter 13 Bankruptcy Lawyer

Forrest Ingram

Another form of debt relief is Chapter 13 bankruptcy. Chapter 13 does not admonish debt; it provides the debtor with a payment plan for existing debt. This method stops harassment by creditors. Chapter 13 reduces the amount of money that you pay each month and pays all your bills: credit cards, auto loans, student loans, medical bills, parking tickets, the IRS, repossessions, etc. Chapter 13 bankruptcy is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. Chapter 13 bankruptcy allows the individual to make affordable monthly payments to a trustee. A payment plan is proposed which repays the debt over a three to five year period. The amount of the monthly payment and the length of the repayment plan is based upon the following factors:

Monthly income of the person
Monthly expenses of the person
Amount and nature of the debt

The most common uses of Chapter 13 involve:

Repayment of mortgage arrears (back amounts owed)
Restructuring of auto loans to save a vehicle

The benefits of a chapter 13 are that it can STOP a mortgage foreclosure that is already in progress. It will even allow you to reinstate your driver's license if suspended due to too many parking tickets or being in an accident without insurance. Chapter 13 bankruptcy is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.

Secured debts are paid 100% on the dollar, while unsecured debts may be paid less than 100% on the dollar. A person receives a discharge under Chapter 13 once the payment plan is completed.

To be eligible to file a Chapter 13, you need to be employed or have other regular monthly income, such as social security benefits or rental income from real estate. To file a Chapter 13, Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.

Can I file for more than one type of bankruptcy?

You can file a Chapter 13 even if you have previously filed a Chapter 13 or a Chapter 7, as long as your previous case is no longer pending.

What happens after the petition is filed?

After your petition is filed with the Court, we will send you a copy of the "Automatic Stay", and a letter advising you when and where to start your Chapter 13 payments. The payments can be deducted from your paycheck if you so desire. The payments are sent to the Court-appointed Trustee. The Trustee will distribute your payments to your creditors each month.

About four weeks after your case is filed, you will be required to attend a short meeting at the Trustee's office. We will appear with you at the meeting, where you will be asked some brief questions concerning your income and expenses.

A few weeks after the meeting, the Court will approve your plan and the Trustee will start paying your creditors. When your plan has been completed, your debts will have been paid in full and you will receive a Court-ordered discharge of your debts.

How much money and how long?

The amount of the plan payments and the length of the plan will depend upon your current income and current expenses, the types of debts that you have, and the amounts that you owe. You will need our legal advice to determine the monthly payments and the length of the plan.

Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.

Debts that are generally consolidated in a Chapter 13 bankruptcy are mortgage arrears, balances on vehicle loans, student loans, credit card debts and other unsecured debts. All outstanding debts must be included in the Chapter 13 consolidation.

Can Chapter 13 stop Foreclosure?

If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure any time prior to the sale, and allow you to repay your mortgage arrears through your Chapter 13. You will still be obligated to make all future mortgage payments directly to the mortgage company, but they may not foreclose to collect any outstanding mortgage payments.

Can Chapter 13 Save my car?

If the "repo" man is looking for your car, a Chapter 13 bankruptcy will also stop the finance company from repossessing your car. The past due payments and the entire balance on your vehicle loan will be consolidated, which you will pay off over the next three to five years. The vehicle finance company can no longer repossess your car, and you will no longer have to make a payment directly to the finance company. Only one payment is made, and that is to the Chapter 13 trustee. Under certain circumstances we can even recover your vehicle after repossession and consolidate the remaining balance.

How does chapter 13 differ from chapter 7?

The basic difference between chapter 7 and chapter 13 is that under chapter 7 the debtor’s nonexempt property (if any exists) is liquidated to pay as much as possible of the debtor’s debts, while in most chapter 13 cases a portion of the debtor’s future income is used to pay as much of the debtor’s debts as is feasible considering the debtor's circumstances. As a practical matter, under chapter 7 the debtor loses all or most of his or her nonexempt property and receives a chapter 7 discharge, which releases the debtor from liability for most debts. Under chapter 7, the debtor usually retains his or her nonexempt property, must pay off as much of his or her debts as the court deems feasible, and receives a chapter 13 discharge, which is broader than a chapter 7 discharge and releases the debtor from liability for several types of debts that are not dischargeable under chapter 7. However, a chapter 13 cue normally lasts much longer than a chapter 7 case and is usually more expensive for the debtor.

Can I consolidate Student Loans?

Although you may not eliminate student loans in a Chapter 7 bankruptcy, you can consolidate them, with your other bills, in a Chapter 13 and stop collection action against you. Chapter 13 can consolidate your bills so that you may repay them in a plan that is feasible for you.

Does Chapter 13 Protect Cosigners on my defaulted loans?

Your cosigners receive the same protection that you receive under Chapter 13. Through a Chapter 13, we will protect your cosigners from collection activity, and the creditors must wait to be paid. So, if you friend or relative cosigned on your vehicle, and you are having trouble affording the payments, we can put your remaining balance inside a Chapter 13.

Representing clients throughout Illinois: Chicago, Aurora, Addison, Chicago Heights, Joliet, Hinsdale, Plainfield, Rolling Meadows, Des Plaines, Schaumburg, Palatine, Elk Grove Village, Hoffman Estates, Arlington Heights, Mount Prospect, Hanover Park, Streamwood, Prospect Heights, Wheeling, Wheaton, Waukegan, Inverness, Barrington, Buffalo Grove, Elgin, Bartlett, Itasca, Bloomingdale, Wooddale, Cook County, DuPage County, Lake County, McHenry County, and Will County

(312) 759-2838 - 79 W. Monroe, Suite 900, Chicago, IL 60603