Chapter 13 Bankruptcy
Chapter 13: The Wage Earner's Plan
Not everyone is eligible to file a Chapter 7 bankruptcy, the form that can wipe out your debt completely. People who have a regular source of income and too many assets to qualify for Chapter 7 can file Chapter 13 bankruptcy.
A Reasonable Repayment Plan
Often called the wage earner's plan, Chapter 13 bankruptcy is a reorganization of debt rather than a liquidation of assets. It allows people to pay back a portion of their debt over three to five years. Chapter 13 bankruptcy has many attractive features. For example:
- You keep your property.
- Your payments are affordable.
In a Chapter 13 bankruptcy, you pay yourself first. We start with your income and deduct your living expenses, including rent or mortgage, utilities, food, gas, clothing and other essentials. Your payment comes out of what is left over, not the other way around.
Do You Qualify?
Because it is a repayment plan, you must have a steady source of income to be eligible to file Chapter 13 bankruptcy. If your income is seasonal or sporadic, the court may not allow you this option.
If your debt is too high, you are also ineligible to file Chapter 13. Your secured debts, like homes, or cars, cannot exceed $922,975. Unsecured debts, like medical bills, cannot be more than $307,675.
Credit Counseling Required
Before you can file for bankruptcy, you must complete a credit counseling course by an agency approved by the United States Trustee's office. Once you complete the course and file a certificate of completion with the court, the bankruptcy filing can move forward.
To learn if Chapter 13 bankruptcy is right for you, please contact the attorneys of Serpe, Dizonno & Associates for a free consultation. Our experienced bankruptcy lawyers can explain the entire process.
We represent clients in DuPage County and Cook County, Illinois.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
