If you are thinning of filing for Chapter 13, do not think that you can or should file bankruptcy yourself. You are better off if you hire a Wood Dale bankruptcy attorney. Chapter 13 is just too complicated. There are so much little nuances regarding the numbers and things like that and how much the creditors get per month but I don’t want to bog you down with that. I want you to be able to first spot when a 13 is appropriate. If someone has mortgage arrears and they want to save their house, immediately a 13 comes to mind. Can they do it? Can we propose a feasible plan?
Number two, if they have done a 7 within eight years, the only option for us to help them is a 13 which often will help them because whatever was not eliminated in the Chapter 7 is still hanging around. Maybe it’s parking tickets, maybe its child-support, who knows. Maybe they incurred a big medical bill after the 7 was filed. The 13 now would allow them to repay that over the next 60 months. Again, I don’t want to get too technical. There are little rules on that and we will get to all that. But you want to be able to spot a 13.
Also, if there is a huge surplus of income, let’s say they come in and they want a Chapter 7, they want a fresh start but you look at everything and you’re like wait a minute, they have way too much assets here. You’ve got equity in your house, you’ve got $15,000 in your bank account because they were taking the mortgage payments so the money you did have available was building up in your account. Or you are making too much money. You are way over the median so you are never going to qualify for a Chapter 7 like an individual who makes $85,000 a year. He is not getting a Chapter 7, because the median is $40,000. And I don’t care how many mortgages you have and how many bottles you have. You are not passing the means test. So that person would be eligible for a Chapter 13. Illinois bankruptcy cases are going to be looked at by the Trustees so you want them to be accurate.
Also, if you have somebody with just modest means; they could be making $30,000 per year but if you come to the income and expense form of the questionnaire and you can’t show a balance – if you are showing a surplus balance, they can’t do a chapter 7. So let’s say they live with the folks and they are not paying any rent but they’re making $30,000 per year and their car is paid. All you are going to have are these little piddly expenses. So in that case, that person would not be able to do a seven because they say wait a minute, you’ve got available money per month. IF the debtor can make a reasonable payment plan through Chapter 13, then that is what he or she should do. There are a lot of bankruptcy options to consider. Chapter 7 is the most common followed by Chapter 13. Your attorney will guide you through the process.