Decatur Chapter 13 Bankruptcy Attorneys

The bankruptcy lawyers of Barr & Barr Law advise individuals and families throughout the region about Chapter 13 relief: how it works, what it involves, and whether it makes sense under your circumstances.

Sound Advice About Debt Relief In Central Illinois

If you’re under the pressure of mortgage foreclosure, wage garnishment or credit card debt that is more than you’ll ever be able to repay, our attorneys can explain your options and guide you through the Chapter 13 process, if that appears to be the best alternative for resolving your financial problems. Contact us in Decatur for a free consultation.

What Is Chapter 13 Bankruptcy?

Chapter 13 is a form of bankruptcy available to individuals and married couples that offers the same protection against creditor debt collection efforts as Chapter 7, but that requires the debtor to repay a percentage of unsecured claims under a debt repayment plan. Instead of getting a discharge of qualified debts within about four months of filing the petition, which most Chapter 7 debtors can expect, a Chapter 13 debtor makes payments each month into the Chapter 13 plan for a period of three to five years.

The Chapter 13 payments cover things like the past-due portion of mortgage debts, unpaid taxes, student loan arrearages and unsecured claims of all kinds. The amount of the monthly payment is a function of the debtor’s disposable income, and must be enough to pay more toward general unsecured claims than would have been paid in a Chapter 7 case. In practical terms, this means that most people will end up paying back about 10 or 15 percent of their unsecured indebtedness subject to discharge.

Performing Under The Chapter 13 Plan

A Chapter 13 repayment plan will be tailored to your budget, but it obviously requires a steady income in order to make it work. Once the repayment period is complete, the unpaid portion of the unsecured indebtedness is discharged. Along the way, the debtor enjoys bankruptcy court protection from collections or creditor harassment on prepetition debts during the full length of the Chapter 13 plan period.

Everything being equal, most people would rather file for bankruptcy under Chapter 7 instead of Chapter 13, but the choice isn’t always available. Here are some of the reasons why you might need to file under Chapter 13, or even choose it as your best bankruptcy option:

• A Chapter 7 filing and discharge within the past eight years makes you ineligible for Chapter 7 relief now
• Your adjusted household income is too high under the Chapter 7 means test
• You’re facing mortgage foreclosure and you want to keep your house
• You have assets that you cannot exempt from creditors in Chapter 7

Our Decatur Chapter 13 bankruptcy lawyers will advise you about your alternatives based on the nature of your financial pressures as well as your income, assets, expenses and liabilities. Our goal is to help you find practical debt solutions that make sense for your specific circumstances.

Chapter 13 Frequently Asked Questions

We know bankruptcy can be confusing, so we’ve provided some common questions below. Contact us if you have other questions.

What does Chapter 13 bankruptcy do for you?

Chapter 13 lets you reorganize your debt into a plan with payments you can afford to make. It allows you to keep property such as your home and vehicles, as long as you are making the payments on them according to the plan. It can also eliminate many of your unsecured debts after the plan is completed.

Is it better to file Chapter 7 or Chapter 13 bankruptcy?

It depends on the type of debt you have, the amount of income you have and your goals for bankruptcy. You must pass the Means Test to qualify for Chapter 7. If you have too much income for that, you may choose to file Chapter 13 instead. If you have sufficient income and you have primarily secured debts (mortgage, vehicle loan, etc.), then Chapter 13 may be the right choice. Chapter 13 does take longer and is more complex than Chapter 7, however.

Does Chapter 13 bankruptcy wipe out all debt?

No, there are certain types of debt that are not dischargeable in bankruptcy, including:

• Student loan debt
• Tax debt
• Alimony and child support
• Recently purchased luxury items
• Debts from personal injuries you caused
• Fines and fees from criminal activity, including drunk driving

Macon County Debt Relief Attorneys: Call Us At 217-875-5311

Find out more about the ways Chapter 13 can help you resolve a mortgage problem, deal with nondischargeable tax or student loan debt, or relieve creditor pressure across a range of financial problems. Contact a knowledgeable bankruptcy lawyer at Barr & Barr Law in Decatur for a free consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.