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Chapter 13 Information

Chapter 13 bankruptcy, sometimes called reorganization bankruptcy, is quite different from Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you don’t have to hand over any property, but you must use your income to pay some or all of what you owe to your creditors over time – from three to five years, depending on the size of your debts and income.

Chapter 13 bankruptcy isn’t for everyone. Because Chapter 13 requires you to use your income to repay some or all of your debt, you’ll have to prove to the court that you can afford to meet your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13.

If you need representation or advice, the Chapter 13 bankruptcy attorneys at Lynch Law Offices, P.C., can help. We work with individuals and businesses in Wheaton, Naperville and throughout DuPage County. Call us today at 630-761-5274 or use our online form to send us an email.

How Chapter 13 Bankruptcy Plans Work

Your Chapter 13 plan must pay certain debts in full. These debts are called “priority debts,” because they’re considered sufficiently important to jump to the head of the bankruptcy repayment line. Priority debts include child support and alimony, wages you owe to employees and certain tax obligations.

In addition, your plan must include your regular payments on secured debts, such as a car loan or mortgage, as well as repayment of any arrearages on the debts (the amount by which you’ve fallen behind in your payments).

The plan must show that any disposable income you have left after making these required payments will go toward repaying your unsecured debts, such as credit card or medical bills. You don’t have to repay these debts in full (or at all, in some cases). You just have to show that you are putting any remaining income toward their repayment.

Once you complete your repayment plan, all remaining debts that are eligible for discharge will be wiped out.

For a free consultation about bankruptcy, call our firm at 630-761-5274.

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