Filing For Chapter 13 Bankruptcy
From the moment you call us for help until the end of your payment plan, we will be here to protect your interests. During our first meeting, we will help you decide if Chapter 13 Bankruptcy is the right debt relief option for you.
For people who make too much to qualify for Chapter 7 Bankruptcy, or those who want to avoid home foreclosure, Chapter 13 is often the best option. Here is how it works:
- As soon as we file for bankruptcy, all creditor collections must stop.
- Your debts will be combined into one repayment plan that you can afford.
- The repayment plan is paid back on a regular basis for a period up to five years.
- After the plan is completed, most remaining debts will be discharged.
Harassing phone calls from creditors, wage garnishments and lawsuits can be overwhelming. Chapter 13 Bankruptcy can put an end to all of that.
Do I Qualify For A Chapter 7 Bankruptcy In Illinois
Individuals, small businesses, and corporations can file this form of bankruptcy, which is great at getting rid of eligible unsecured debts like medical bills, personal loans, and credit card debts. The eligible persons or businesses that can file a Chapter 7 bankruptcy in Illinois depends on the means test – the process of determining if the debtor has enough disposable income to repay the debts under Chapter 13 based on several criteria like:
- Household income
- Household size
- Expenses within a set period
Persons whose annual income is below the states median income for the household size qualify for Chapter 7 bankruptcy and do not need to calculate expenses. However, persons who are above the median may check the disposable income after expenses. Parties who fail the test cannot appeal the decision but may reapply after six months or file other types of bankruptcies.
Note: A debtor must wait eight years after filing a Chapter 7 to file another Chapter 7 bankruptcy
Chapter 13 Bankruptcy Faqs
We understand that the discussion of bankruptcy can be a confusing and complicated one. Here are a few of our most frequently ask chapter 13 bankruptcy questions to get you started on the path to financial freedom. You can find a complete list of our Bankruptcy FAQs here.
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What Is The Downside Of Filing For Bankruptcy In Illinois
Debtors often suffer damages on their credit score as a consequence of a bankruptcy filing. This may further lead to higher interest rates and may negatively impact the debtor’s ability to get loans, credit cards, tax refunds, or mortgages. Depending on the type of bankruptcy entered, bankruptcy shall be reflected on the credit report for about 7 to 10 years.
However, the effect varies according to the initial credit score. High credit scores can fall by 200-240 points, while average scores can fall by 130-150 points. Nevertheless, it is possible to recover from this effect with good credit behavior. On the other hand, persons with low credit scores between 400 and 500 may witness an increase of up to 50 points.
Additionally, individuals who file for Chapter 7 bankruptcy will lose assets due to liquidation. This may include real estate, vehicles, investments, and valuable collections. However, primary residence and other exempt properties are not subject to this. Individuals should also note that not all debts are dischargeable. For instance, student loans, child support, alimony, and other fines are exempt. Other possible consequences of bankruptcy include job restrictions, frozen bank accounts, and housing stigma.
Bankruptcy Courts And Districts In Illinois
- East St. Louis, IL 62201 482-9371
In either case, the Chapter 13 bankruptcy process in Illinois is the same. You need to begin by deciding whether Chapter 13 is right for you, locate a Chapter 13 bankruptcy attorney, complete the bankruptcy forms, and attend your bankruptcy hearings.
Lets discuss the Chapter 13 bankruptcy process in Illinois in more detail.
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Can I Still File For Chapter 7 Bankruptcy
Yes! Its possible to have both Chapter 7 and 13 bankruptcies on your record at the same time . If you want to do this, speak with a Chapter 13 bankruptcy lawyer from Pioletti Pioletti & Nichols first so they can discuss how this might affect your case as well as other factors such as whether or not these two types of cases can be combined into one petition instead of two separate filings or whether theyll need two separate hearings before two different judges or trustees in two different courts.
Additional Benefits Of Chapter 13
Experienced and knowledgeable attorneys can guide you through the process of Chapter 13 bankruptcy. Some additional benefits of this kind of bankruptcy include:
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Filing for bankruptcy can delay foreclosure proceedings to catch up on your mortgage or buy time for alternative solutions.
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Chapter 13 may allow you to discharge a second mortgage on your home if you owe more than what your home is currently worth.
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Chapter 13 can restructure your auto loan to make it more affordable if you owe more than what your car is currently worth.
Itâs a stressful time for you and your loved ones, and the emotional toll is a burden. Let Robert J. Adams & Associates Inc. do some of the heavy lifting so you can get back to your life. When a reliable team of bankruptcy attorneys on your case, you can take a deep breath and feel confident that your situation is in good hands and that a more financially stable tomorrow is within reach.
CHAPTER 13 ATTORNEYS SERVING CHICAGO, ILLINOIS
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Can A Bankruptcy Be Expunged In Illinois
Depending on the type, bankruptcy claims and filings will remain on a partys record for several years. Chapter 7 bankruptcy stays on record for ten years, while Chapter 4 stays on record for seven years. Illinois state laws dictate that the court may grant expungement and sealing of records if petitioned, but bankruptcy records do not qualify.
Illinois Personal Injury & Wrongful Death Award/settlement Exemptions
The State of Illinois allows you to exempt a wrongful death award up to the amount that is considered reasonable for the support of the bankruptcy filer. Personal injury awards and settlements are also exempt up to $15,000. You can also exempt an entire workers compensation award/settlement. You can read more about these exemptions on our page on workers compensation/personal injury and bankruptcy.
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When Do I Get My Chapter 13 Discharge
The debtor will continue to make payments under the plan to the trustee until the plan has run its course. â¯Before receiving a discharge, the debtor must complete a financial management course, which can be taken online. â¯The debtor being current on all domestic support obligations is another prerequisite to discharge. â¯Any debts covered by the plan will be discharged, even if the plan did not provide for them to be paid in full.
What Happens To Nonexempt Property
As previously mentioned, an overwhelming majority of people who file Chapter 7 get to keep all of their property. However, this isnt always the case. Any property that isnt exempt in the State of Illinois would be considered nonexempt property. Your nonexempt property will be sold by the bankruptcy trustee with the proceeds used to pay off creditors for a portion of the debt you owe.
If you have property that would be considered nonexempt that you absolutely want to keep, you may want to instead consider filing for a Chapter 13 bankruptcy. With a Chapter 13 bankruptcy, youll keep your nonexempt property and instead pay creditors the value of whichever is greater: your nonexempt property, your nondischargeable debt, or your disposable income.
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What If The Debtor Incurs New Debts Or Needs Credit During A Chapter 13 Case
Debts or credit obligations incurred after the case is filed must be paid by the debtor outside the plan, and cannot be included in the current chapter 13 bankruptcy. The court issues an order prohibiting the debtor from incurring new debts during the case unless they are approved in advance by the chapter 13 trustee. Therefore, the approval of the trustee should be obtained before incurring credit or new debts after the case has been filed via your bankruptcy attorney. The incurrence of regular debts, such as debts for telephone service and utilities, do not require the trustees approval.
What If The Debtor Is Temporarily Unable To Make The Chapter 13 Payments
If the debtor is temporarily out of work, injured, or otherwise unable to make the payments required under a chapter 13 plan, the plan can usually be modified so as to enable the debtor to resume the payments when he or she is able to do so. If it appears that the debtors inability to make required payments will continue indefinitely or for an extended period, the case may be dismissed or converted to chapter 7. A debtor has several options, each with certain requirements, that require assistance from your bankruptcy attorney.
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Contact A Kane County Chapter 13 Bankruptcy Lawyer
If you are considering bankruptcy as a solution to your debt, DLAW, PC can make the process easier. We will evaluate your case and help you decide whether Chapter 13 bankruptcy makes sense for your family. Contact us at 331-222-7978 to arrange a free and confidential consultation. We serve clients throughout DuPage County and Kane County, including Geneva, St. Charles, Elgin, Aurora, Sugar Grove, and Batavia.
Reaffirmation Agreements In Illinois
If you own your home outright, without a mortgage or outstanding equity loans, there is a good possibility that it will be sold by the trustee in bankruptcy to pay off creditors. If you meet the exemption requirements, however, or the trustee decides not to sell a home secured by a loan, you will need to complete a reaffirmation agreement with your lender or lenders in order to keep the property. In the reaffirmation agreement, you must agree that your obligations will not be discharged in bankruptcy and that you will continue to make payments on the loan. If a reaffirmation agreement is not completed, your loan can be discharged, but the lenderusually a bankcan take your home. The team at Newland & Newland, LLP will help you draft a reaffirmation agreement that protects your rights and keeps you in your home for as long as you wish to stay there.
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If I File Bankruptcy How Will It Affect My Future Credit And My Job
Different people have different experiences obtaining credit after they file for bankruptcy. As a general rule, most people find it more difficult to obtain long-term credit, such as a home mortgage, shortly after a bankruptcy has been filed. For other types of credit, however, experiences vary depending on other factors. The Bankruptcy Code prohibits your employer from discharging you or discriminating against you solely because you have filed a bankruptcy case. A bankruptcy can remain on your credit report for up to 10 years, but many people are able to raise their credit score to a relatively good level within a few years after bankruptcy.
Where Are The Bankruptcy Courts In Illinois
Bankruptcy courts in Illinois are divided into 3 districts with 7 locations. The court locations include:
- Northern District
The statutes require you or your attorneys to file with the court a petition and the necessary records to start proceedings. After your case is filed, the judge issues an automatic stay, which is a court order that forbids your creditors from even contacting you. Imagine not being afraid to answer the phone! Bankruptcy laws can offer you that freedom.
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How Often Can You File Chapter 13 In Illinois
Some people go through several financial difficulties during their lifetime. A person could need help from the bankruptcy system more than once. For that reason, bankruptcy cases are not limited to one case per person. You can file bankruptcy again if you need debt relief.
There are no restrictions on the number of bankruptcy cases a person may file. However, there are mandatory waiting times for obtaining a bankruptcy discharge. The bankruptcy discharge is the legal order that forgives your debt. Therefore, filing a bankruptcy case without receiving a bankruptcy discharge is generally a waste of time and money.
If you need to file another bankruptcy case, it is crucial to know the waiting periods for receiving a bankruptcy discharge. The time limits are based on the filing dates of the bankruptcy cases:
Four YearsTwo Years
It is usually best to talk to a bankruptcy lawyer before filing Chapter 13 again. You want to ensure that there are no specific situations that apply in your case that could interfere with obtaining another Chapter 13 bankruptcy discharge. Also, there could be another debt relief option that would work in your situation that could help you avoid another Chapter 13 bankruptcy in Illinois.
What Is Chapter 11 Bankruptcy In Illinois
Commonly referred to as a reorganization plan, Chapter 11 bankruptcy in Illinois is an option used by debtors with huge debts, which involves reorganizing debts and assets. Usually, this form of bankruptcy is filed by businesses who wish to continue operations and protect assets, but it is also available to individuals whose assets and debts exceed the limits for other types of bankruptcy. For instance, as of April 1, 2019, individuals with secured debts exceeding $1,257,850 or unsecured debt over $419,275 cannot file Chapter 13 bankruptcy .
Generally, Chapter 11 bankruptcy can be done voluntarily by the debtor or involuntarily by creditors. However, the following may be restricted:
- An individual with a dismissed bankruptcy petition may not file until after 180 days.
- Stock and commodity brokers
- Persons who did not receive credit counseling within 180 days before filing
- The commencement or continuation of a criminal proceeding against the debtor
- The commencement or continuation of a civil action against the debtor, especially concerning divorce, child custody, domestic support obligations, and establishment of paternity
- Government tax audits
Next, the company or individual may file a reorganization plan – a proposal for debt settlement, asset disbursement, and structural changes in business operations. The debtor may file this within 120 days unless reduced or extended to a period not exceeding 18 months. The plan must:
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Completing Your Bankruptcy Forms
A typical Chapter 13 bankruptcy package could be 100 or more pages. When you file Chapter 13, you must complete the approved bankruptcy forms and any local bankruptcy forms required by the bankruptcy court. Your bankruptcy lawyer completes the forms and reviews each form with you to ensure accuracy and completeness before the attorney files the forms with the court.
The forms for a Illinois Chapter 13 case includes information about your:
- Real estate
- Co-debtors
- Leases and Executory Contracts
The Statement of Financial Affairs is a form with almost two dozen questions about your received financial transactions. It includes income for the past two years, recent payments to certain creditors and insiders, a list of lawsuits, gifts, contributions, leases, transfers, and other information. Your bankruptcy attorney assists you in gathering information and completing your bankruptcy forms.
How Much Does A Chapter 13 Cost In Illinois
There are several costs of filing Chapter 13 in Illinois. Chapter 13 bankruptcy costs in Illinois include bankruptcy attorney fees, the trustee fees, filing fee, bankruptcy courses and miscellaneous costs.
1) Bankruptcy Attorney Fees
The bankruptcy attorney fees for a Chapter 13 case are higher than the fees charged for a Chapter 7 case because there is much more work for the attorney to perform in a Chapter 13 bankruptcy case. However, you do not need to pay all the fees upfront. Bankruptcy attorneys generally include all or most of the Chapter 13 bankruptcy fees in the Chapter 13 plan.
Chapter 13 bankruptcy lawyers can itemize their fees, but most charge a flat fee for Chapter 13 cases. The Illinois Bankruptcy Courts limit the flat fee amounts, which are increased periodically to reflect inflation. These are called no look fees.
If you are interested in filing Chapter 13, you can use our Bankruptcy Attorney Fee Estimator to obtain an estimate of the attorneys fees for Chapter 13 in your area. You also receive a list of Chapter 13 bankruptcy attorneys near you. Ascend can help you contact the attorneys to arrange a free consultation to discuss filing Chapter 13 in Illinois in more detail.
2) Illinois Chapter 13 Bankruptcy Trustee Fees
One of the highest costs in a Chapter 13 bankruptcy in Illinois is the Chapter 13 bankruptcy trustee fees. A Chapter 13 bankruptcy is often a 3 or 5-year plan. So, there are many administrative tasks for the Chapter 13 bankruptcy trustee.
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Chicago Chapter 13 Bankruptcy Lawyers
Are you buried in unpaid bills? Are you missing mortgage payments? Have you received a foreclosure notice? You don’t have to give up hope! An Illinois 13 plan can stop foreclosure and repossession while protecting your wages or other assets. Debt restructuring can give you the time you need to dig yourself out of debt and get back on the path to prosperity. Instead of paying the full amount you owe, you will make new payments determined by the amount you can actually afford.
What Is A Chapter 13 Plan
It is a written plan presented to the bankruptcy court by a debtor and his or her attorney. The plan states how much money or other property the debtor will pay to the chapter 13 trustee, how long the debtors payments to the trustee will continue, how much will be paid to each of the debtors creditors, which creditors will be paid outside of the plan, and certain other technical matters.
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