Chapter 13 Bankruptcy: Qualifications And Overview

Wonais Law

Chapter 13 Bankruptcy Lawyer

Filing for bankruptcy is something you should consider if you are struggling to pay your bills, behind on your car note or mortgage, or being sued by a creditor. As an individual, you can file either Chapter 7 bankruptcy or Chapter 13 bankruptcy. In this blog, we will explain Chapter 13 bankruptcy and the requirements to file. When deciding whether to file for bankruptcy, it is important to get advice from a lawyer who has ample bankruptcy experience. At DebtPros, our founder, John Wonais, is a bankruptcy lawyer who has represented thousands of people in bankruptcy cases in Chicago.

What is Chapter 13 Bankruptcy?

There are many reasons to file for Chapter 13 bankruptcy. Whether you are facing foreclosure, car repossession, or overwhelming debt, filing for bankruptcy can help you get a fresh start. Unlike in a Chapter 7 bankruptcy, you keep your assets in a Chapter 13. For example, if you are behind on your car note or mortgage, you can file Chapter 13 bankruptcy and repay that debt back in your bankruptcy plan to prevent repossession or foreclosure.  

The first step to filing bankruptcy is preparing and filing a bankruptcy petition. The document details your financial situation, such as your income, expenses, assets, and liabilities. Additionally, once the case is filed, you propose a repayment plan detailing how much you will be payment back your creditors and your monthly payments.

The second the case is filed an automatic stay goes into effect. This stay prevents creditors from calling you, filing lawsuits against you, repossessing your car, pursuing foreclosure, and garnishing your wages, among others. The purpose of this is to give you breathing room from your creditors allowing you to focus on restructuring your debt.

After your case is filed, you will have a 341 meeting about a month after the case is filed. This meeting is with the trustee and any creditors who wish to appear. During the meeting, the trustee will ask you questions about your petition to make sure there are no changes that need to be made. The meeting will last roughly 5-10 minutes and is nothing to be stressed about. Our attorneys will also prepare you for the meeting.

The next important date in your case is your confirmation hearing. At this hearing, creditors or the trustee may appear to object to your case. Typical creditor objections include asking for better treatment of their claim in the case. Trustee objections vary, but typically involve issues in your case that need to be amended. If everything goes well, the judge will confirm your case and your main obligation going forward is making your trustee payments.

Lastly, once you have completed your plan and have paid all creditors the amount proposed under your plan you will receive your discharge order. The discharge order is an order and is mailed to creditors informing them the debt has been discharged.  

Can I file for Chapter 13 Bankruptcy?

There are a few requirements to filing Chapter 13 bankruptcy and eligibility requirements. At DebtPros, a bankruptcy lawyer will speak with you and help determine whether you qualify and inform you of the requirements you need to take to file the case.

To file bankruptcy, you must complete a credit counseling class approved by the jurisdiction you are filing in. These classes are available online or over the phone and a company will be provided to you by your bankruptcy lawyer.

Additionally, to file Chapter 13 bankruptcy, you must provide your attorney with proof of your income, and tax returns. Generally, you must provide the last 4 years of tax returns unless you are not required to file.

To qualify for Chapter 13 bankruptcy, you need to have under a certain amount of debt. For secured debt, your debt must be less than $1.25 million. For unsecured debt, your debt must be less than $420,000. These are usually not barriers to filing. However, if your debt exceeds these limits, you may have to file a Chapter 11 case.

Finally, you must have disposable income to fund the plan. This does not necessarily mean you need a job to file Chapter 13. Instead, all forms of income, such as social security, are allowable income to fund your plan.

Call to speak with a Chicago Bankruptcy Lawyer!

If you are considering filing for Chapter 13 bankruptcy, do not wait to call DebtPros. When you call you will speak directly with a bankruptcy lawyer who will determine if you qualify and explain the process to you. We offer free consultations and are here for you. Contact us now at (312) 883-5422 to receive your free consultation!

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