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 "disposable 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.
From our office in Glen Ellyn, Illinois, we proudly serve DuPage County, Kane County, Will County, Lake County and Cook County, including: Naperville, Wheaton, Lombard, Hinsdale, Lisle, Carol Stream, Downers Grove, Westmont, Elmhurst, Addison, Joliet, Plainfield, Darien, Willowbrook, Bolingbrook and many others. We are your local source for bankruptcy advice. This law firm is a Debt Relief Agency under Federal Law.
Chapter 13: Avoid Foreclosure - Save your House and Cars
Law Offices of
Arthur W. Rummler
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