Dixon & Johnston Law Office Answers Your FAQ About Chapter 13 Bankruptcy
We know you likely have a lot of questions about Chapter 13 bankruptcy in Belleville, IL. Dixon & Johnston Law Office has been practicing bankruptcy law for over 30 years, so we’ve heard just about every question you could have. We want to help you to be informed about the Chapter 13 bankruptcy process. Our team of attorneys is committed to resolving your bankruptcy case so you can move on with your life. Financial burdens can create a lot of stress, and not being able to make your payments only makes it worse. Allow us to assist you in getting out from under your debt and living a more comfortable life. Our attorneys are here to help guide you through your Chapter 13 bankruptcy. Below are some of the frequently asked questions we receive at our Belleville, IL office.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a type of bankruptcy that allows a debtor to repay some or all of their debts under court supervision. Choosing bankruptcy Chapter 13 means that as a debtor, you can obtain relief from your creditors by submitting a plan to pay your debts during a period of 36 to 60 months in most circumstances. Many unsecured debts can be discharged even though they are paid very little. During your protected repayment plan period, your creditors may not contact you for payment. Once you complete your Chapter 13 plan, you are relieved of liability for the rest of your dischargeable debts. A Chapter 13 bankruptcy case is especially useful for stopping the foreclosure of your home or repossession of your vehicle. Our Chapter 13 bankruptcy lawyers can get you up to five years to get caught up on your mortgage. Your foreclosure stops as soon as you file.
How Do Chapter 7 and Chapter 13 Bankruptcy Differ?
Chapter 13 bankruptcy involves a repayment plan, although debtors frequently only pay a small percentage of their debt. Chapter 7 bankruptcy is quicker and easier but sometimes is just not practical. Most people who declare Chapter 13 bankruptcy retain their nonexempt property if they are able to repay their debts within the predetermined time frame. Chapter 13 bankruptcy cases typically last longer and are more costly than a Chapter 7 case. However, Chapter 13 is the preferred option for debtors who:
- Have property they might lose in a Chapter 7 bankruptcy.
- Want to repay their debts and have the means to do so in a reasonable timeframe.
- Are not eligible for Chapter 7 based on results of the means test or because they filed a Chapter 7 in the past eight years.
- Have significant debts that Chapter 13 can discharge, but Chapter 7 cannot.
Who Is Eligible to File for Chapter 13 Bankruptcy?
There are specific qualifications you must meet in order to file a Chapter 13 plan. The skilled Chapter 13 bankruptcy attorneys at Dixon & Johnston Law Office will guide you through any options available in the face of declaring bankruptcy. If you deem it necessary to file for Chapter 13 bankruptcy, you must:
- Live in, do business in, or own property in the United States.
- Have a regular income.
- Have secured debts totaling less than $1,257,850.
- Have unsecured debts totaling less than $419,275.
- A married couple may jointly file for Chapter 13 bankruptcy with only one spouse needing regular income.
Must Debtors Pay Debts in Full Under a Chapter 13 Plan?
No, generally you will not need to pay your debts in full when filing bankruptcy Chapter 13. Chapter 13 requires filers to pay all their debts that they can reasonably afford. If you complete your Plan payments, you usually receive a discharge. Certain priority debts such as taxes and child support will be paid in full, but those creditors must stop collection action while you are in the Chapter 13.
In What Way Is a Chapter 13 Bankruptcy Different Than a Chapter 7 Bankruptcy?
Chapter 7 is a quicker process, but some clients are not eligible for Chapter 7. Chapter 13 bankruptcy is known as a reorganization bankruptcy. Chapter 13 allows you to keep your property and discharge your debts in a three to five-year repayment plan.
What Determines Whether the Bankruptcy Court Will Approve My Chapter 13 Plan?
After filing for Chapter 13 bankruptcy, the court will schedule a confirmation hearing. If no trustee or creditors object to your proposed plan, it will be confirmed by the court at your hearing.
How Much of My Debt Will I Have to Repay If I File for Chapter 13 Bankruptcy?
Chapter 13 bankruptcy payments involve calculations. You are required to pay your nonpriority creditors at least the amount that they would have received if you filed for a Chapter 7 bankruptcy. You will be required to pay your unsecured creditors from 0 to 100% of what you owe them. That amount will be determined by your income and assets.
How Long Will My Repayment Plan Last If I Decide to File for Bankruptcy Under Chapter 13?
A Chapter 13 bankruptcy allows you to repay all or part of your debts in a period of three to five years.
We’re Facing Foreclosure. If We File for Chapter 13 Bankruptcy, Can We Keep Our Home?
Yes. Filing for Chapter 13 bankruptcy can help you save your house if you’re facing a foreclosure. Filing will stop the sale and allow you to catch up on your past-due payments over a period of up to five years.
Contact Dixon & Johnston Law Office to Discuss Chapter 13 Bankruptcy
The highly-seasoned bankruptcy attorneys at Dixon & Johnston Law Office in Belleville, IL are experienced in Chapter 13 of the Bankruptcy Code. Allow our team to help you determine the proper steps to take to resolve your outstanding debt. We will provide you with all the information you need and help you file for Chapter 13 bankruptcy. Our lawyers are committed to making the process as simple as possible and achieving the best outcome for you. Contact us today to schedule your free initial consultation.