Chapter 7 and Chapter 13 Bankruptcy Information

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Description of Chapter 7

Erase Debt with "Straight Bankruptcy"
Chapter 7 bankruptcy will eliminate unsecured debts, such as credit cards, utility bills, medical bills, personal loans and debts owed on a repossessed car. Let one of our Chicagoland Bankruptcy Attorneys help!

Debts not covered
Chapter 7 will not eliminate secured debts, like car loans and mortgages. If you want to keep your house or car, you must continue to make those payments. A Chapter 7 will also not eliminate debts such as student loans, recent tax bills, parking tickets, child support, alimony payments, or accidents caused by drunk driving. Those types of debts can only be dealt with through Chapter 13. Let one of our Chicagoland Bankruptcy Lawyers help!

Avoiding problems when filing Chapter 7
Because of the many nuances in Chapter 7 law, the specific terms of any filing will only become clear once the facts of a particular situation are known. If you are considering filing Chapter 7, there are a few things you should not do:

• Do not make any more charges or take any cash advances on any of your credit cards.
• Do not make any property transfers.
• Do not pay off one of your credit cards. That is called a "preference" and will make it more difficult for you to get a discharge.

The Chapter 7 filing process
Filing Chapter 7 is relatively easy. There are typically no court appearances necessary. You need only to appear (with your attorney) for a very informal meeting that takes place about five weeks after your case is filed. This meeting is referred to as a Section 341 Meeting. The purpose of this meeting is for a court-appointed trustee to ask you a few very brief questions to determine whether you have any non-exempt assets. Your creditors are given notice of this meeting and are permitted to question you, but usually they are not present. The meeting generally takes less than five minutes. After the meeting, all you have to do is wait about two-and-a-half months for your discharge papers to arrive in the mail.

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Description of Chapter 13

Reorganize Your Bills
Chapter 13 is referred to as a court-ordered debt consolidation. Chapter 13 will stop a pending foreclosure or car repossession. It will stop a wage assignment or wage garnishment. It will even prevent the IRS from taking any tax refunds that you are entitled to. In short, a Chapter 13 will allow you some breathing room so you can reorganize your finances.

Reorganizing your debts
When you file a Chapter 13, you are essentially consolidating all of your debts into one large debt. Payments are made either once a month by you to a court-appointed trustee, or are deducted automatically from your paycheck, whichever you prefer. The trustee will then distribute your money among all of your creditors according to a plan that we will help you formulate.

In a Chapter 13 you only have to pay back what you can afford. This determination is based on your income, your living expenses, the amount of your debt, your assets and types of debt you have. Chapter 13 can help you deal with recent student loans, recent tax debts, parking tickets and other debts that cannot be discharged in a Chapter 7.

The filing process
Filing Chapter 13 is very simple. After your case is filed with the court, you will go with your attorney to the office of the trustee. This meeting takes place about six weeks after your case is filed and is very informal. The purpose of the meeting is for a trustee to go over your case to make sure the plan that we have filed on your behalf is workable. Assuming that the trustee recommends your plan-and he/she almost always does-your case will be set for confirmation in front of a judge. You do not need to be present in court for your confirmation hearing-we will be there for you. Then, all you need to do a make your monthly payment to your trustee. If you prefer, we can arrange for your payment to be automatically deducted from your paycheck.

Duration of Chapter 13
The typical Chapter 13 plan will last between three and five years. If your financial situation improves during that time, you may choose to pay off your Chapter 13 plan in a shorter amount of time without penalty.

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At the bankruptcy law center of attorney Stuart Handelman has lawyers on hand who are able to serve the following areas in Illinois, Chicago, Joliet, Hickory Hills, Olympia Fields and many other locations in the Chicagoland area.

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