Illinois Chapter 13 Bankruptcy Attorney

Chapter 13 bankruptcy, also called reorganization or wage earner bankruptcy, is very different from Chapter 7 bankruptcy. Rather than eliminating your debt, Chapter 13 bankruptcy helps you repay your debt using your income. Depending on your debt and income circumstances, a repayment plan lasts either three or five years.

Chapter 13 Bankruptcy Eligibility

Chapter 13 bankruptcy filings are now the most common type of bankruptcy filings. This is due in part to the stricter standards for Chapter 7 eligibility. Chapter 13 bankruptcy also is also subject to petitioner eligibility. In order to qualify for Chapter 13 bankruptcy your secured debt must be less than $1,010,650, and your unsecured debt must be less tan $336,900. Additionally, you must show that your income is sufficient and consistent enough for you to meet your repayment obligations.

How Chapter 13 Bankruptcy Works

When you file for Chapter 13 Bankruptcy, you must submit a repayment plan to the court. This repayment plan outlines how you will repay your creditors. Certain debts (“priority debts”) must be paid in full including child support, spousal maintenance, employee wages and some tax debts. A repayment plan also includes regular payments on secured debts. You must show that whatever income you have left after meeting your priority and secured debt obligations is going towards repaying your unsecured debts, such as credit cards. Unsecured debts are not required to be paid in full, however. When you satisfy the terms of your repayment plan, any left over debt is discharged.

Hiring a Chapter 13 Bankruptcy Attorney

In 2005, numerous changes were made to federal bankruptcy laws that make it more difficult for individuals and businesses to file for any form of bankruptcy. Not only are eligibility requirements stricter, there is also more complicated paperwork required. Consequently, it is advisable to hire a knowledgeable bankruptcy attorney to handle your petition. At Northwest Suburban Bankruptcy, we help clients navigate the often complex process of filing for bankruptcy. Our firm gives personal attention to both individuals and small businesses. contact us today to schedule a consultation.