Channahon Bankruptcy Attorney

Chapter 13 is the most difficult form of consumer bankruptcy.  You really should hire a competent, Channahon bankruptcy attorney who is seasoned in Chapter 13 practice.  It is not the type of situation where you should file bankruptcy yourself.  For example, with Chapter 13, once a plan is confirmed, the terms are set in stone and generally cannot be altered.  If the debtors fall behind in their plan payments, the trustee will likely dismiss their case if they are unable to come up with money to get current with the plan.  Let’s examine the role of creditors in Chapter 13.  Creditors are required to submit claims to the bankruptcy court in order to get paid.  Creditors must object to the treatment of the claims in the bankruptcy if they have a problem with the treatment, for example, if the debt scheduled is lower than the amount actually owed, or the interest rate is too low.


Illinois bankruptcy cases, especially those filed under Chapter 13 can have a high failure rate, for a variety of reasons.  A case will fail and be dismissed when the debtors stop making the plan payments.  When a Chapter 13 plan fails, it can cause major problems for the debtor.  The problem arises due to the compounding of interest.  In a successful Chapter 13 plan, the creditors are paid through the plan pursuant to the terms of the plan, and the discharge order finishes the plan and makes all the changes stick.  When a case fails, there is no discharge order to make the changes stick, so all the interest charges come back and are compounded retroactively.  Chapter 13 cases can also be converted to Chapter 7, depending on the circumstances at the time of conversion.  Conversion is a good option if a high-income debtor becomes unemployed or there is some other circumstance that negates the initial reason for the Chapter 13.  When a Chapter 13 case is converted to Chapter 7, a Chapter 7 trustee is appointed and the process follows like any other Chapter 7 case.  When a case is converted, your Chicago bankruptcy lawyer will be able to represent you at the final 341 meeting of creditors.


Lastly, and keep this information in mind when you are seeking bankruptcy advice, that bankruptcy is a very powerful legal tool, and can be used to help many people.  From a poor debtor with $3,000 in payday loans to multi-billion-dollar companies like General Motors, bankruptcy can provide a way to reduce or eliminate debt and provide a clean, fresh start.  With the proper knowledge, proper planning, and proper application of the law, bankruptcy can be a great tool to provide debt relief.  I can think of no other scenario where a person who is buried in debt and come out of debt in just a matter of days.  What a great source of relief that bankruptcy protection can provide.


Posted in Illinois Bankruptcy |