A seasoned chapter 13 lawyer Peoria IL residents trust knows that in order to file for bankruptcy, you are required to file under the chapter which is most appropriate for your financial situation. If you have been struggling under a mountain of debt, you may want to consider contacting a bankruptcy attorney to discover your legal options.
At Smith & Weer, P.C., we specialize in debt relief and consumer protection and can help you obtain a fresh financial start. The Peoria chapter 13 lawyer at our firm has assisted a wide variety of clients and is available to offer you the best legal solution based on your circumstances.
What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcies?
A skilled chapter 13 lawyer Peoria IL clients recommend can review your financial state to determine if you qualify for chapter 13 bankruptcy instead of chapter 7.
In a chapter 7 bankruptcy, all of your nonexempt assets are sold or liquidated by the bankruptcy trustee that is appointed to oversee your bankruptcy. The funds from this liquidation are used to pay your creditors to reduce as much of your debt as possible. Chapter 7 is sometimes referred to as an asset-based bankruptcy.
A chapter 13 bankruptcy is different in that it is a reorganization of your debt based on your income, not your assets. It is sometimes referred to as an income-based bankruptcy because of the way creditors are repaid. A chapter 13 lawyer Peoria IL offers knows that the bankruptcy court will consider your total income and from that deduct living expenses plus a reasonable allowance. It will then determine the amount creditors will be paid based on the balance of your income.
The Bankruptcy Process
According to the U.S. Bankruptcy Code, there are many assets you are able to keep in a chapter 13 bankruptcy filing. These assets include your homestead, personal vehicle, personal property, job-related equipment, and income. There are certain criteria associated with each of these assets. Your bankruptcy attorney can explain in detail what those criteria are and how they may apply to your individual situation.
The repayment plans are set up for a three-to-five year period. At the end of this period, whatever balance is still owed to any creditors is deemed paid in full and you now have no remaining debt. Keep in mind, however, this only applies to unsecured debt such as credit cards or utility bills. It does not apply to secured debt, such as a home or vehicle.
When Is Chapter 13 Better than Chapter 7?
Chapter 13 bankruptcy isn’t the perfect solution for everyone, but there are several situations where it may be a wise way to solve your financial issues. One common example is when you have a large loan — such as a car loan — or significant credit card debt that you want to pay back and can pay back with more time. Chapter 7 bankruptcy does not allow claimants to pay back these debts. Chapter 13 allows you to restructure your debts to make back payments, and this may actually help you rebuild your credit.
Another situation is if you have significant debts that are exempt from Chapter 7. Student loans are a prime example of debts that cannot be included in Chapter 7. A Chapter 13 case may allow you to restructure your student loans.
Lastly, you might contact a Chapter 13 lawyer in Pekin IL if you have nonexempt property that you want to try to keep. Chapter 7 bankruptcy will liquidate the majority of your assets, but Chapter 13 bankruptcy might allow you to keep some of these assets.
Chapter 13 Bankruptcy Eligibility
Even if Chapter 13 bankruptcy sounds like a better option for your situation, you still need to make sure that you are eligible to file for it.
Firstly, businesses cannot file for Chapter 13 bankruptcy; only individuals are eligible. However, if you own and operate your own small business, you might be able to include some of your business-related debts under a Chapter 13 case if you alone are individually responsible for paying those debts. This can be a very complicated issue, so if you believe that your business-related debts may be eligible under Chapter 13, be sure to discuss this with a Chapter 13 lawyer Pekin IL can provide.
Secondly, you need to have a viable source of income that will allow you to create a feasible repayment plan. Many individuals are able to collect steady income through a job, but different benefit plans — such as Social Security payments or disability payments — may also be valid. If you are married, your spouse’s income may be considered a valid source of income. A Chapter 13 lawyer Pekin IL families depend on may help you identify all of your income sources that may apply to a bankruptcy case.
Thirdly, to qualify for Chapter 13 bankruptcy, your debts cannot be too high. There are two limits on your debts: one for secured debts and one for unsecured debts. These limits are constantly being adjusted to account for inflation.
Contact a Chapter 13 Lawyer Peoria IL That Clients Trust
If you are struggling with overwhelming debt, contact a chapter 13 lawyer in Peoria IL today. The legal team at Smith & Weer, P.C. can meet with you and conduct a meticulous examination of your financial situation. Following that, your attorney can discuss all of your debt relief options, both for bankruptcy and alternative solutions.
Contact a professional chapter 13 lawyer Peoria IL residents count on at Smith & Weer, P.C. by calling 309-694-6700, or if you prefer, fill out a contact form on our website.