We've previously discussed some of the basic requirements for filing a bankruptcy case under Chapter 13 of the federal bankruptcy code in Illinois, including the debt limits for different types of debt, and the fact that the debtor should not have failed to appear or comply in a similar case in the prior 6 months. We've also touched on some of the differences between a Chapter 7 filing, which is sometimes called a 'liquidation,' and a Chapter 13 restructuring of debt.
When most Illinois residents hear the term 'bankruptcy,' they likely picture a liquidation, where all a person's major possessions are sold to pay off his or her debt. While a Chapter 7 filing might require some of that -- though there are exemptions for certain property -- there are other types of bankruptcy filing as well. One of these is a Chapter 13, or 'wage earner's plan.' This types of filing allows the debtor to submit a repayment plan that proposes to pay some part of the debt over a certain number of years, usually three or five. One advantage of this kind of filing is that, under certain circumstances, it can stop a foreclosure or other repossession action.
Life can get expensive in a hurry. Many people today live paycheck to paycheck because the cost of living is so high in relation to their incomes. While this may sustain many for a time period, if anything unexpected happens, it can send a person's financial situation into a skid. Declaring Chapter 13 can help to get those suffering under the weight of debts a fresh financial start.
For many Illinoisans considering whether to file for Chapter 13 bankruptcy, one of the key issues is their credit scores. Or, more specifically, bankruptcy's deleterious effect on those score. But just how serious are these concerns? Let's explore that further.
When Illinoisans file for Chapter 13 bankruptcy (in addition to bankruptcy under other chapters), they benefit from an automatic stay. This stay prohibits creditors from trying to collect on the debt. That means the end of harassing phone calls and a pause in any litigation, including foreclosures.
Did you ever watch "Friends"? The character Joey wasn't known for being all that bright, but he did well with the ladies. His signature pickup line was, "How YOU doin'?" It's a question that someone in Illinois might well want to ask themselves when it comes to their credit rating.
Wells Fargo uses the six-horse stagecoach as its logo. The company's website describes the vehicles as "living symbols of the company's heritage of service, stability, and innovation." Its marketing videos usually feature one charging hard across an open field. After this week, some in Illinois might wonder if maybe the coach's final destination should be a barn or the wood shed.
Jeff Foxworthy's fan base might not be solid in Chicago, but the comedian does have some good one-liners. For example, there's this one. "You might be a redneck if... the stock market crashes and it doesn't affect you one bit." Foxworthy has a whole slew of these. The suggestion of most is that those who fit his redneck stereotype tend to be in lower income brackets.
We have said before that Illinois individuals can find themselves in dire financial trouble through no fault of their own. If there is anything fresh in everyone's mind since the last Great Recession, it is that our conditions can change in no time flat. Bankruptcy in the form of either Chapter 7 or Chapter 13 filings are the means by which the government makes it possible for people and businesses to keep their heads above water, find relief and get back on solid footing.
Debt collection is big business and one of the most effective tools collecting companies use is the court system. According to an investigative series by ProPublica, the practice of debt buying firms turning to the courts really began to take off in the late 1990s. It peaked in the mid 2000s but continues to be a lucrative revenue source for debt buyers still today.