Instead of liquidating assets like Chapter 7, Chapter 13 offers a structured repayment plan where you contribute a portion of your disposable income over 3-5 years to settle your debts. This provides significant benefits:
- Keep Your Valuables: Protect your home, car, and all other assets from foreclosure or repossession. Also, in Chapter 13 the trustee cannot sell any of your assets, regardless of value. Everything is safe in Chapter 13.
- Stop Creditor Harassment: Breathe easy with an immediate halt to lawsuits, wage garnishments, and collection calls.
- Reduce and Reorganize Debt: Craft a personalized plan to manage your debt sustainably. Surrender property or short sale real estate within Chapter 13 plan.
- Get a Fresh Start: Upon completion, discharge most remaining unsecured debts like credit cards and medical bills.
What's the difference between Chapter 7 and 13 ?
Why Choose Chapter 13?
Chapter 13 may be a good option for you if:
- You have a regular income
- You want to keep your property
- You have high-interest debt
- You are facing foreclosure or repossession
Benefits of Chapter 13 Bankruptcy:
- Stop the stress and anxiety of overwhelming debt
- Get a fresh start with a clean slate
- Restructure your debt and interest rate
- Lower your vehicle monthly payments
- Wipe away parking and red light tickets
- Protect your co-signers
Free Consultation
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The Chapter 13 Process
- Credit counseling: Attend a credit counseling session from an approved agency.
- Income Review: Determine your eligibility for Chapter 13 based on means test.
- File a petition and schedules: These documents list your debts, assets, and income.
- Develop a repayment plan: Work with your attorney to create a plan you can afford.
- Confirmation hearing: The court reviews your plan and decides whether to approve it.
- Make monthly payments: Make your payments to the Chapter 13 trustee, who distributes them to your creditors.
- Discharge of debt: After completing your plan, any remaining unsecured debt is discharged.
Chapter 13 Timeline
Day 1
File your petition & secure protection with the "automatic stay" which stops all collection efforts such as repossession and foreclosure immediately.
30 Days
Make your first bankruptcy plan payment and have a meeting with the bankruptcy trustee to discuss your finances. Creditors may attend, but rarely do.
4-6 Weeks
Confirmation hearing on your bankruptcy repayment plan. Court approves your plan with possible adjustments.
3-5 Years
Repayment period & credit approvals. Make regular payments and get court approval for new credit if needed.
Plan Completion
Order of Discharge & fresh start. Receive a bankruptcy discharge of most debts and enjoy a clean financial slate.
Don’t wait any longer to get the help you need.
We’re here to help you get back on your feet.
Common Questions
How Long Does Chapter 13 Take?
A Chapter 13 bankruptcy typically spans 3-5 years, depending on your income and goals. However, it can be shorter in specific circumstances, like converting to Chapter 7 or paying off your Chapter 13 plan with proceeds from a property sale.
How Long Does Bankruptcy Stay On My Credit Report?
Bankruptcy typically remains on your credit report for up to 10 years. However, its impact on your credit score diminishes over time, especially with responsible financial habits and rebuilding efforts. While it may affect your creditworthiness, many individuals begin to rebuild their credit shortly after the bankruptcy process, securing a fresh financial start.
How Much Are Attorney Fees For Chapter 13 Bankruptcy?
In the Northern District of Illinois, Attorney fees are capped at $4500 for a duration of 3-5 years. Furthermore, the filing fees for a Chapter 13 bankruptcy stand at $313. Attorney fees can be paid through the Bankruptcy Plan, and you can get started for as little at $350.
