td@drexlaw.com
+1-312-726-7335

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy Lawyers in Chicago, IL

Chicago & Suburbs Chapter 13 Legal Representation

It may be hard to believe, given the mountain of collections letters, foreclosure notices, and repossession warnings that the lender sends, but the bank does not really want to take your house or your car. The bank just wants your money. Unfortunately, if you fell a few months behind for whatever reason, you may not be able to catch up quickly enough to satisfy the finance company. If you find yourself in this situation, it may be time to contact an experienced bankruptcy attorney in Chicago.

Chapter 13 is a payment plan, often referred to as a “wage earner” plan. Under these cases, you pay back a certain percentage of your debt, generally from 10% up to 100%. Your monthly payment and the length of your case is based on your individual circumstances, and can only be determined after a thorough analysis of your debt, your income, your equity in your property, and other matters affecting your financial status.

People choose to file Chapter 13 for a variety of reasons. One of the most common is when their property is in foreclosure. In general, the filing of a Chapter 13 will immediately stop a foreclosure case and a foreclosure sale if done properly. After your case is filed, to retain your home, you must make your regular monthly mortgage payments, plus a Chapter 13 payment to catch up the amount past due on your mortgage. Failure to make timely payments after your case is filed may result in the foreclosure case starting up again. If you can’t afford your mortgage payments, a Chapter 13 may give you time to pursue a mortgage modification in order to have your mortgage payments reduced.

A Chapter 13 can also stop the repossession and sale of your car. Car payments will typically be adjusted and become part of your Chapter 13 payment.

A Chapter 13 Plan acts as a debt consolidation plan – that is, all your debts will be handled through one monthly payment. You remain responsible to pay directly, on your own, your regular monthly living expenses (food, gas, insurance, etc.) and usually your mortgage payment. A Chapter 13 plan typically runs a minimum of 36 months but not more than 60 months.

Besides the advantage of stopping a foreclosure or repossession as discussed above, a Chapter 13 will give you the ability to become debt free. A person who owes $20,000.00 in credit cards with an average interest rate of 20% might only be able to afford to pay $350.00 per month on that debt, and it would take over 15 years to pay it off. In a Chapter 13, even with a lower payment, a person might be able to resolve that debt in 3 years, because interest does not build and because only a portion of the debt may have to be paid.

A Chapter 13 bankruptcy begins in much the same way as a Chapter 7 bankruptcy. As soon as your lawyer files a voluntary petition, an automatic stay goes into effect. Instead of waiting and hoping the bank calls off the foreclosure sale or repossession auction, you can take matters into your own hands and save your property. In most cases, this automatic stay remains in effect for the duration of the proceeding. You also have the opportunity to file financial disclosures so all parties involved know you have nothing to hide.

The trustee in a Chapter 13 essentially places you on a  budget for three to five years. After your regular monthly expenses are provided for, any leftover money goes to satisfy your debts. As long as the plan satisfies legal requirements, your lenders must accept the repayment terms which we would prepare as your lawyer. In addition, if you are involved in a mortgage modification dispute or some similar event, you may be able to obtain a much more favorable outcome due to the time allowed by the bankruptcy process.

Thousands of people file Chapter 13 Bankruptcy every year in the Chicagoland area. To take the first step, contact us for a free consultation with an experienced bankruptcy attorney in Chicago.

Call The Law Office of Thomas W. Drexler Today @ 312.726.7335