Chicago Chapter 13 Bankruptcy Attorney

Are you feeling cornered by escalating debts? Are you stressed about potentially losing your home or car? If so, filing for a Chapter 13 bankruptcy might be a viable option for you. In Chicago, IL, Chapter 13 bankruptcy is not about losing what you own; it’s about holding onto it while you regain control over your finances.

Imagine being able to restructure your debt, making it smaller, more organized, and more manageable. Think of a debt repayment plan that is actually within your reach. That’s exactly what Chapter 13 can do for you. And the best part? You don’t need to let go of your personal possessions, not your car, not your home – nothing.

With DebtPros in your corner, bankruptcy is not a blemish on your financial record – it’s a strategy to get a sound grip on your debt. Our founder, attorney John Peter Wonais, is a leading Chicago bankruptcy lawyer and financial expert with a penchant for helping people. John has built DebtPros on the premise that everyone deserves a fair shot at financial recovery. With us, you’re not just another case file. 

We know you are a person with dreams, aspirations, and the determination to overcome financial hurdles. So, we are here to stand with you and aggressively support you every step of the way to help you reclaim your financial freedom.

Chapter 13 Bankruptcy: What You Should Know

Filing for bankruptcy in Chicago, or anywhere in Illinois, can be a stressful process. However, understanding how Chapter 13 exemptions under the bankruptcy law work can provide some relief. Exemptions are designed to protect certain properties from your creditors so you don’t lose everything.

In Chapter 13 bankruptcy, the exemptions you claim will impact how much you will pay back to creditors through your repayment plan, which means you need to have a clear idea of what you can exempt. Here are the key facts you need to know about Chapter 13 exemptions:

Choosing between state and federal exemptions

In Illinois, you have the option to choose between state and federal exemptions, but you can’t mix and match—you must pick one set or the other.

Illinois exemptions

This state offers various exemptions to protect your property, including the following:

• Homestead exemption: This exemption protects equity in your home; you can exempt up to $15,000 if you are single or $30,000 if you are married.
• Motor vehicle exemption: You can protect up to $2,400 of equity in your car under Illinois law.
• Personal property exemption: This can include clothing, family pictures, and school books. Certain specified items, like your bible or other religious texts, health aids, and necessary apparel, are exempt without limit.

Non-exempt property in Chapter 13

Unlike Chapter 7 bankruptcy, when you file bankruptcy in Chapter 13, you don’t necessarily lose your non-exempt property. Instead, the value of these assets determines how much you need to repay your creditors through your repayment plan.

The Chapter 13 repayment plan

Under Chapter 13, you create a repayment plan to pay back some or all of your debts over three to five years, whether as a monthly payment or another periodic payment plan. The value of your non-exempt property sets a minimum on what you have to pay to unsecured creditors like credit card companies. Essentially, they must receive at least as much as they would have in a Chapter 7 bankruptcy.

The process of filing for Chapter 13 in Illinois can be very complicated, so seeking guidance from a DebtPros bankruptcy attorney is highly recommended. We can inform you about all current exemption amounts and help you choose between state and federal exemptions based on what’s best for your unique situation.

Am I Eligible to File for Chapter 13 Bankruptcy in Chicago?

Whether or not you can file for Chapter 13 in Illinois depends on the following primary factors:

Have you had bankruptcy counseling?

First things first, you must get credit counseling from a government-approved agency within 180 days before you file for bankruptcy. So, make sure you complete this step.

Are you a business or an individual?

Chapter 13 is for individuals, not businesses. But if you run a business as a sole proprietor, you can still file for Chapter 13 in your name and include business-related debts.

Can you afford to pay your living expenses and make payments towards your debt?

Chapter 13 is a reorganization bankruptcy. You need a regular income to make your monthly payments under a Chapter 13 repayment plan. If you cannot afford your necessary monthly living expenses and have enough money left to make payments on your repayment plan, Chapter 13 may not be for you.

Are your debts too high?

For a Chapter 13 bankruptcy case filed between April 1, 2022, and March 31, 2025, your secured debts (like a mortgage or car loan) cannot exceed $1,395,875, and your unsecured debts (like credit card debt) cannot exceed $465,275.  

Have you filed for bankruptcy before?

If you received a discharge in a Chapter 7, 11, or 12 bankruptcy case filed within the past four years or a Chapter 13 case filed within the past two years in a bankruptcy court, you cannot file for Chapter 13.

Are your tax filings up to date?

You will need to prove you have filed your state and federal tax returns for the four years prior to your bankruptcy filing.

If you are still not sure or you have any questions, our bankruptcy lawyers will be happy to answer your questions during a free consultation and talk you through the process step-by-step.

Frequently Asked Questions

Can I file for Chapter 13 bankruptcy in Chicago if I have filed for bankruptcy before?

Yes, you can. But if you received a discharge in a Chapter 7, 11, or 12 case within the past four years or a Chapter 13 case within the past two years, you are not eligible.

Do I have to get credit counseling before filing for Chapter 13?

Yes, that’s non-negotiable. You need to complete credit counseling with a government-approved agency within 180 days before filing.

Can businesses file for Chapter 13 bankruptcy?

No, businesses cannot file for Chapter 13 bankruptcy. However, sole proprietors can include business debts in their personal Chapter 13 filing.

Does Chapter 13 bankruptcy wipe out all my debts?

No. Some debts like student loans, child support, and recent taxes usually cannot be discharged.

Can I get rid of second or third mortgages under Chapter 13 bankruptcy?

Yes, potentially. It is possible to remove junior liens from your property under certain conditions, such as if your home is worth less than what you owe on your first mortgage.

Is Chapter 13 bankruptcy better than Chapter 7?

It depends. Both have their benefits and drawbacks. Chapter 13 is good if you have a regular income, want to keep your property, and pay off your debts over time.

Will Chapter 13 stop foreclosure on my home?

Yes, it can halt foreclosure proceedings and allow you to catch up on missed mortgage payments over time.

Can I keep my car if I file for Chapter 13?

Yes. Similar to foreclosure, filing for Chapter 13 can halt repossession and allow you to catch up on missed payments.

How long does a Chapter 13 stay on my credit report?

It typically stays on your report for seven years from the filing date. However, as you make consistent payments over time, your score may start to recover.

Can I file for Chapter 13 if I am unemployed?

Usually, no. This type of bankruptcy requires a regular income for the repayment plan. However, if you have a stable source of non-employment income, you might be eligible. Non-employment income refers to any income that isn’t received from traditional employment or a job. This can include a variety of sources, such as:

• Investment income (dividends, interest, or capital gains)
• Rental income
• Retirement income (pensions, annuities, or distributions from retirement accounts like 401(k)s or IRAs)
• Social Security benefits
• Money received as alimony or child support
• Business or self-employment income
• Unemployment benefits

These types of income could potentially qualify you for a Chapter 13, but you will need to prove they are regular and stable.

How long will my Chapter 13 plan last?

It depends. Plans usually last three to five years, depending on your income and the amount of debt you have.

Can I pay off my Chapter 13 plan early?

Yes, but it is not simple. You can pay off your plan early if you can show that the creditors have received at least as much as they would have in a Chapter 7 bankruptcy.

Can I discharge a student loan in Chapter 13?

No, typically, student loans cannot be discharged. However, you can pay them off over the course of your repayment plan.

Does Chapter 13 cover medical bills?

Yes. Chapter 13 bankruptcy can help you manage medical debt by incorporating it into your repayment plan.

Will I have to go to court if I file?

Yes. You will usually need to attend a meeting of creditors and a confirmation hearing.

Can I keep my credit cards in a Chapter 13 bankruptcy?

No. You will need to surrender your credit cards when you file.

Will Chapter 13 stop a wage garnishment?

Yes, filing for Chapter 13 can halt most types of wage garnishments.

Can I file for Chapter 13 with my spouse?

Yes, you can file jointly with your spouse, but you are not required to.

Chicago Zero Money Down Bankruptcy Services

With DebtPros, you don’t have to dig deep into your pockets to get expert help during this difficult time – you can file for bankruptcy today with no money down.

Our expert attorneys will file your bankruptcy petitions without requiring a single penny upfront. Your journey towards a debt-free life starts without adding to your financial strain. Plus, you don’t need to spend any money for a legal or financial consultation. At DebtPros, our consultations are absolutely free!

We are here to provide you with expert advice without any initial costs. It is our way of showing you that we truly care about your financial health and want you to get out from under that mountain of debt without delay.

Find Relief and Rebuild Your Finances: Consult with DebtPros Today

If you are feeling overwhelmed by your crushing debt and considering Chapter 13 bankruptcy, look no further than DebtPros, where our dedicated team of Chapter 13 bankruptcy attorneys is here to guide you through the complex process. We will:

• Discuss alternatives to Chapter 13 with you. There might be other solutions like consolidating your debts or loan restructuring, and we want to ensure you make an informed choice.
• Prepare your bankruptcy petition paperwork meticulously. We handle all the paperwork so you can focus on getting your life back on track.
• Draft a fair and feasible repayment plan proposal. We understand your situation, and we will work toward a plan that respects your financial constraints.
• Be your advocate if creditors raise objections to your repayment proposal. If necessary, we will make revisions to ensure a fair outcome.

Our goal is to put you back on the path to financial stability as soon as possible. If you are thinking of filing for Chapter 13 in Chicago, IL, why not start with a free, confidential, no-obligation case evaluation from DebtPros?

DebtPros is more than just a law firm. We are a partner dedicated to guiding you through your legal rights and your options for dealing with your seemingly crushing debt – like we have done for so many others before you. Our team is conveniently located in Chicago, ready to help you through this challenging time. Get in touch with us online or call us at (312) 883-5422 and let us help you get back to a debt-free life!