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What to Expect: Filing for Chapter 13 Bankruptcy in Illinois

Written by: Michael J. Helfand

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Posted over 2 years ago. Applies to Illinois, 2 helpful votes, 0 comments

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Petition

The first step is to file a petition telling the court that you want to file for Chapter 13 bankruptcy. There are specific courts for bankruptcy, and you will need to file your petition at the correct one. In most cases, the correct location is the bankruptcy court closest to where you live. There is a filing fee. In addition to some basic information, the court wants to know what your assets are, as well as your debts.

Trustee

Next, the court assigns a trustee to oversee parts of your case, including any repayment plan you end up with. The trustee is neutral. They are not representing either you or your creditors. The trustee does not take the place of an attorney. If you want legal representation throughout the process (and we recommend it), it’s up to you to find a lawyer.

Repayment plan

In Chapter 13 bankruptcy, you and the trustee work together to set up a repayment plan. Basically, you will make scheduled payments for a set number of years (usually three to five years). Under the plan, your debts are consolidated and often reduced. After the repayment period, your remaining debts are discharged, or cleared. There are some exceptions.

Creditor notification and meeting

The court notifies your creditors that you are filing for bankruptcy. You will have to go to court for the “meeting of creditors.” You and the trustee attend this meeting, as well as any creditors who wish to be there. At this meeting, you will have to answer questions, under oath, about your financial situation and your repayment plan. Because it’s likely that a debt will only be partially paid during the plan, and thereafter cleared, creditors are involved in this process. They may attend the meeting to argue that they should be paid.

Hearing

After the meeting of creditors, you will have a court hearing at which the judge will consider your repayment plan, and hopefully approve it. Creditors are allowed to attend this hearing, and they may object to your payment plan.

Discharge

Discharge happens at the end of your repayment plan. At that point, your remaining debts will be cleared and those creditors can no longer seek payment from you. Keep in mind that certain debts cannot be discharged. The law doesn’t allow you to get rid of certain debts, like child support, spousal support, some student loans, and some types of taxes.

Your attorney

The process can be confusing, and you probably have a million questions. An experienced attorney can help you through bankruptcy by answering your questions, keeping you on track, and ensuring that you get the best outcome possible. There are some things to keep in mind when looking for an attorney. You’ll want someone who knows what they’re doing, so make sure they have a lot of experience with Chapter 13 bankruptcy. Ask whether they appear often in the particular court where your petition will be filed. Ask about their fees, their customer service, and their plan for your case. Too often, clients don’t take the time to interview an attorney before hiring him or her. Asking questions upfront can save you a lot of trouble later on.

Additional Resources

If you are considering filing for Chapter 13 bankruptcy, talk to an attorney first. An experienced lawyer is the right person to help you make this decision. Need help finding someone? We can help. We’ll talk to you about your situation, and recommend an attorney in your area who has significant bankruptcy experience. Your call is confidential and free. 1-800-517-1614.

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