Chapter 13 Bankruptcy

Chapter 13 Bankruptcy

When people think of financial ruin, they think of bankruptcy. Not all types of bankruptcy are like that, though. Chapter 13 bankruptcy is a bit different in that you agree to a repayment plan instead of having your debts wiped clean. You repay some or all of your debts. You get to keep your possessions like your home or car while making payments that are more manageable.

Chapter 13 bankruptcy, also called a wage earner’s plan, is a good option for those who earn regular income. Your issue is not income, but the immediate payment demanded by creditors. You repay debts over a period of three to five years. If income is sporadic or you are in between jobs, then Chapter 7 bankruptcy may be a better option for you. Consult with an Orland Park bankruptcy attorney at Forst Law Office for legal assistance with your Chapter 13 filing.

How Chapter 13 Bankruptcy Works

To qualify for Chapter 13 bankruptcy, you have to have unsecured debt of no more than $394,725. This includes personal loans and credit card bills. The limit for secured debts is $1,184,200. This includes cars and homes.

If you are eligible, the first step is to see a lawyer, who can advise you of the process.  You must submit a reorganization plan for secured assets. The plan often asks for forgiveness for other debts. However, not all debts can be discharged under this type of bankruptcy. For example, student loans, alimony, and child support must still be paid.

The requirements of filing for Chapter 13 bankruptcy include paying a fee (around $310) and going to credit counseling. Your lawyer will ask you for information such as a list of creditors and amount due, sources of income, a list of property you own, your monthly expenses and tax information for the past year.

Advantages of Chapter 13 Bankruptcy

The biggest benefit of choosing Chapter 13 bankruptcy over Chapter 7 bankruptcy is that you get to keep your house. Creditors are not allowed to put the home in foreclosure as long as you are making payments according to your plan. You can take longer to pay off debts. You are given up to five years to repay debts, which can lower your monthly payments and make things easier for you so you can pay for necessities such as food and utilities.

In addition, you will have no contact with creditors after you file for bankruptcy. You make payments to a trustee, who then distributes the money to the creditors. It is like a debt consolidation plan.

Get Help From an Illinois Chapter 13 Bankruptcy Lawyer Today

There are two main types of bankruptcy from which a person can choose. Chapter 13 allows a person to hold onto his or her assets, which can be helpful.

Are you struggling financially but have possessions that you want to keep? Then a Chapter 13 bankruptcy may be right for your situation. Seek help from bankruptcy lawyer Richard J. Forst from Forst Law Offices. With nearly 25 years of experience, he has the knowledge and experience to help you with your financial situation. Call his Orland Hills office at 708-949-6440 or fill out the online form to schedule a consultation.

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