In a chapter 13 bankruptcy, all unsecured debt will be dischargeable. By that, I mean credit card bills, medical bills, money owed personally to other people. However, since a chapter 13 encompasses making payments, the amount discharged would be anything not paid in the case. In Chapter 13, long term debt is usually not discharged. If a person needs to walk away from a home, the plan of repayment must specifically tell the mortgage company. Otherwise, when the case is paid in full, the Mortgage will still be due.
Many nuances are involved in chapter 13, as it is very complex. It is crucial if considering a Chapter 13 that the individual speaks with a knowledgeable attorney to make sure filing of the case has the desired result.
Who Qualifies For A Chapter 13 Bankruptcy?
Regarding chapter 13 bankruptcy, anyone can qualify except for three situations. If you are a business, you cannot file a chapter 13; your only options are 7 or 11. If you have over a $1,254,850 in secured debt or more than $419,275 in unsecured debt, you cannot file a 13; you’d have to do a chapter 11 if you want to reorganize. Individuals with higher debt will need to file either a 7 or 11 for bankruptcy relief. A person filing for Chapter 13 must also have a source of income, without income, there will be no way to make payments to creditors.
How Long Does The Chapter 13 Last?
Typically, a chapter 13 cases lasts three to five years. The only exception to this timeframe is that Congress has permitted certain cases an extension of up to two more years under the CARES Act. If something has happened in your life and you’re in active bankruptcy, it’d be a good idea to talk to your attorney and see if you qualify for this assistance.
For more information on Bankruptcy Law in Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (847) 440-5998 today.