What is a Chapter 13 Bankruptcy in Illinois?

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Chapter 13 is a type of “reorganization” used by consumers with “regular income” to pay all or a portion of their debts over a period of time. A debtor is eligible for Chapter 13 if noncontingent, liquidated unsecured debt is equal to or less than $383,175 and noncontingent, liquidated, secured debt is equal to or less than $1,149,525. 



How Does Chapter 13 Work in Illinois?

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In a Chapter 13 bankruptcy case, you file a “plan” showing how you will pay off some or all of your past-due and current debts over a period of three to five years.  In order to have viable plan, you must have sufficient regular income to make monthly payments to a bankruptcy trustee on account of your creditor’s claims.  You will need also to have enough income during your Chapter 13 bankruptcy case to pay for your recognized monthly expenses and to keep up with the required payments as they come due.



While certain types of debts must be paid in full, unsecured debts must be repaid in an amount equal to what would have been paid if the consumer’s non-exempt assets had been sold in a Chapter 7 case. Once you have completed the terms of your, all of your unsecured debts will be considered discharged – or paid in full.  You are responsible post-bankruptcy for any debts not discharged during your Chapter 13 bankruptcy case.



What Happens to my Property in a Chapter 13?

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One of most important aspects of a Chapter 13 bankruptcy case is that you are generally allowed to keep valuable property—i.e., your home and car—which might otherwise be repossessed or foreclosed by secured creditor, if you can make the required payments set forth in your “plan.” In most cases, these payments will need to be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payment to get caught up on the amount you have fallen behind.



How Can Chapter 13 Help Me?



While a Chapter 13 bankruptcy case is not necessarily the best option for every debtor experiencing financial distress, you may want to consider filing a Chapter 13 bankruptcy case if you:



• Cannot pass the Chapter 7 Means Test and have “regular income” sufficient to make monthly payments to your creditors;​

• ​Own real estate or a vehicle and are behind on payments but can catch up if you had some additional time;​

• ​Have valuable non-exempt property that you do not want to lose in a Chapter 7 bankruptcy case and can afford to make monthly payments over time from your regular income

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What are the Requirements for Filing Chapter 13 in Illinois?

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In order to file a Chapter 13 bankruptcy case in Illinois, you need to satisfy the following requirements:



1. You must reside in the U.S;​

2. You must complete the Means Test to determine your Chapter 13 payment; and

3. You must participate in and complete a Credit Counseling course.

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How Do I Get Started?​

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Starting the bankruptcy process begins with completing 360 Legal’s℠ online bankruptcy evaluation or by scheduling your free initial consultation. 

Click Here to Get Started​​