A chapter 13 bankruptcy, also known as a “repayment plan” can help debtors that earn above the Illinois Income Median or have certain non-dischargeable debt. Examples of non-dischargeable debt include child support arrears, personal income tax debt, and alimony. There are some rare cases in which a chapter 13 bankruptcy will work in favor of the debtor. Such as a situation in which a debtor needs to protect certain assets, such as equity in a home or other valuable possessions. 

 

A chapter 13 bankruptcy requires the debtor to use their disposable income (income - expenses) to repay all or a portion of their debt over a three- or five-year period.
 

While a Chapter 13 Bankruptcy can be useful in certain circumstances, nearly 67% fail. They fail so often because attorneys are quick to recommend a Chapter 13 Bankruptcy without a careful review of their client’s financial situation. A Chapter 13 Bankruptcy Repayment Plan can become like a “financial prison” for clients. A chapter 13 Bankruptcy requires that all additional income such as income tax returns, bonuses, and other additional income be used to pay down debt. 

 

Our attorneys attempt to find alternatives to filing a chapter 13 bankruptcy and use chapter 13 bankruptcies as a last resort for our clients.