Chapter 13 Bankruptcy Attorneys

What is a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy consolidates all of your bills into a comfortable repayment plan.  Each month you will make a payment to the assigned Trustee (known as “Trustee Payment.”)

How long does the Chapter 13 plan last?

The length of the repayment plan generally runs between 3 and 5 years (“Plan Term.”)

How much will I pay back?

During the plan term, you will pay your unsecured creditors anywhere between 10% and 100% of what you owe the unsecured creditors – sometimes less than 10%.

Why would I have to file a Chapter 13?

Most people file a Chapter 13 (rather than a Chapter 7) for one of four reasons:

  1. They are behind on their mortgage payments & they want to save their house,
  2. They are behind on their car payments & they want to save their car from repossession,
  3. They have an asset that would be placed in jeopardy in a Chapter 7 case, or
  4. Their income disqualifies them for filing a successful Chapter 7 case.

What determines the percentage I pay to the unsecured creditors?

It is determined by a large number of factors – including: the household income, how many dependents you have, what kind of debt you have (secured/unsecured/priority). This is part of what the attorney will analyze during the free, confidential consultation.

Stripping off the 2nd Mortgage

This is commonly referred to “Lien Stripping” or “Stripping/Removing the Junior Lien.” If the market value of your residence is valued at LESS THAN the amount owed to your first mortgage holder, you may be a candidate to (a) remove the junior liens from the property and (b) have the lien paid through your monthly repayment/trustee payment (for example at 10 cents on each dollar).

What if my situation changes during the life of my Chapter 13?

If things change during the course of your case, call us. We will evaluate whether or not you are still a good candidate for a Chapter 13 case or if we can safely convert your case to a Chapter 7 case. If possible and appropriate, we can petition the Bankruptcy Court to lower your monthly payments based on the change in circumstances.

The Process

After your case is filed with the Bankruptcy Court, there are two important date in the first phase of your case: (a) the Meeting of Creditors and (b) the Confirmation hearing.
(a) Meeting of Creditors: You will go with your attorney to the Office of the Chapter 13 Trustee. This meeting takes place in an office building, about six weeks after your case is filed and is informal. Generally, it will be you and an attorney from this office, sitting across a desk from the hearing officer. The essential purpose of the meeting is for an employee of the Trustee’s office to review your case to make sure the plan that we have filed on your behalf is workable.
(b) Confirmation Hearing: This hearing takes place at the Courthouse & usually your presence is not required. At that time, the attorney representing the Trustee’s office advises the Court whether they support your case being confirmed (meaning, having the Judge give his/her stamp of approval so the case can move forward). Once your case is confirmed, your case successfully moves forward.

Once you case is confirmed, then you continue to make your monthly payment to your Trustee. If you prefer, we can arrange for your payment to be automatically deducted from your paycheck.

Free Consultation with an Illinois Chapter 13 Bankruptcy Law Firm

If you are interested in speaking to one of our Chapter 13 Bankruptcy attorneys regarding your financial situation, please call us for a FREE, confidential consultation at (312) 360-0500.