If you have harassing creditor calls, lawsuits, a lien on your mortgage or wage garnishment, you may be looking for a way out. Chapter 13 can help people with a consistent income but more debt than they can handle. It may allow you to get past financial issues and rebuild your credit.
Known as the Wage Earners bankruptcy, Chapter 13 reorganizes debt, enabling you to pay creditors while keeping your property. It’s intended to help individuals who have a job but don’t earn enough to pay their bills. Chapter 13 has many of the same benefits as Chapter 7, such as:
People who have a job and do not qualify for Chapter 7 may be eligible for Chapter 13.
Chapter 7 and Chapter 13 bankruptcy aims to relieve the debt burden, but they have different eligibility requirements. To be eligible for Chapter 7, you must make below the median income in Illinois. It offers a fresh start by discharging most if not all of your unsecured debts after selling your non-exempt assets.
However, if you have a steady paycheck but more debt than you can pay off, Chapter 13 may be the right choice for you. The primary feature of this bankruptcy is the payment plan. Typically, three to five years, the plan allows you to pay a negotiated amount to each creditor.
At Benjamin Law, we can help you create a realistic budget. It considers not only creditor payments but also current necessities, including your mortgage or rent, vehicle, utilities.
All creditor activity stops once your case is filed. During Chapter 13 bankruptcy, you send the monthly payments to the court-appointed trustee assigned to you. They distribute it to the creditors as agreed upon. Any remaining debt may be discharged at the end of your payment plan, leaving you with a blank slate to begin rebuilding credit.
To be eligible for Chapter 13, you must be within the debt limits. For Illinois residents, it’s approximately $419,000 of unsecured debt and $1,277,000 of secured debt. These amounts are current through 2021 but may change in the future. Unsecured debts include:
Secured debt is backed by collateral, usually an asset. Home equity lines of credit, mortgages and auto loans are among the most common examples of secured debt.
Although both Chapter 13 and Chapter 11 hinge upon reorganization plans, Chapter 11 has no debt limits. However, there are many advantages of Chapter 13:
The longer your bills go unpaid and you dodge collection calls, the bigger your problem can get. Trying to fix it on your own can make your situation worse, leaving you searching for a way out. If you’re feeling overwhelmed and frustrated, call us today. We have been helping Chicagoland residents eliminate, restructure or reorganize their debt since 1989. Get bankruptcy help today! Call now for a free consultation: 312.853.3100.
The attorneys at Benjamin Brand LLP can help you file bankruptcy and wipe out debt while protecting your assets.
Bankruptcy is a last resort. There may be alternatives that can help you deal with the financial burden. Call us at 312.853.3100 for more information about our areas of expertise and to find out if bankruptcy is the best option for you.