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Chapter 13 bankruptcy is one of the most common bankruptcy options nowadays. In this chapter, you attempt to repay your creditors instead of liquidating your assets. However, this is not applicable to all, thus yields to the question, ‘Who can’t file Chapter 13 bankruptcy?’.

Chapter 13 bankruptcy cases are well handled by Cutler & Associates, Ltd. from a law office that is conveniently situated all around Schaumburg. Our Illinois bankruptcy lawyers are dedicated to offering our clients empathetic legal advice and assisting them in obtaining successful results for their cases. 

As you work your way out of debt and toward financial stability, we are honored to be your partner. For a free consultation regarding bankruptcy, if you’re unsure if chapter 13 bankruptcy is a good choice for you, get in touch with our team immediately. We will go over the steps, your options, and how they can be helpful during the session. 

Why do You Need an Experienced Bankruptcy Attorney in Illinois? 

To save money on legal bills, people regularly try for bankruptcy filing on their own. Unfortunately, these folks learn the hard way that is attempting to understand bankruptcy law on their own inevitably costs them far more. When you work with the Chapter 13 bankruptcy attorney at Cutler & Associates, Ltd., we’ll:

  • With our years of experience, we will certainly provide you with the legal counsel you need. Ensuring supporting documents, commonly known as bankruptcy forms, and your bankruptcy petition is accurate and properly prepared.
  • Assist you in preparing for your bankruptcy court appearance.
  • Helping you collaborate with your bankruptcy trustee.
  • Improve your chances of success in bankruptcy.
  • Together, you and your creditors can rebuild your life after bankruptcy.

Financial setbacks, in our opinion, might be an opportunity to move closer to long-term financial stability.

What is Bankruptcy? 

You have the ability to regain control of your finances through a legal process called bankruptcy. For individuals or businesses that have acquired more debt, including tax debt, than they can manage, bankruptcy may be the wisest option.

Below are frequently used by those who declare bankruptcy:

  • Chapter 7 bankruptcy: The most common and fastest type of bankruptcy for individual debtors is Chapter 7, which can be completed in 120 to 180 days on average. By filing for Chapter 7 bankruptcy, all debtors can pay back debt by selling off assets, including real estate, to pay creditors. All debts that qualify for Chapter 7 bankruptcy include medical bills, credit card debt, and personal loans.


  • Chapter 13 bankruptcy: This can be your best option if you don’t qualify for Chapter 7 or wish to keep non-exempt property. However, keep in mind that Chapter 13 bankruptcy takes much longer than Chapter 7. This is because Chapter 13 gives you the option to reorganize debt, including secured debt, into a manageable three- to five-year repayment plan schedule. When the plan expires, any unpaid obligation is canceled.


  • Chapter 11 bankruptcy: The duration of a Chapter 11 bankruptcy differs. The filer often pays creditors less while everyone involved works to restructure the filer’s finances. To facilitate a realistic strategy, the filer may or may not sell the property. Only a small number of Chapter 11 bankruptcy cases are filed annually. Due to the complexity, expense, and typical filing of this type of bankruptcy, both large and small firms need financial assistance from creditors. If a person’s debt is too high for Chapter 13, they can alternatively use Chapter 11.

It is recommended that you consult with a bankruptcy lawyer in Schaumburg to make sure you are fully aware of your options.

How Can Chapter 13 Bankruptcy Help You? 

Compared to Chapter 7 liquidation, Chapter 13 has a lot of benefits for clients as follows:

  • The ability to prevent the foreclosure of one’s house is perhaps Chapter 13’s greatest substantial advantage. People can halt foreclosure actions and possibly cure past-due mortgage payment over time by filing under this provision. However, they are still obligated to make any mortgage payments that are due on schedule throughout the chapter 13 plan. 
  • The ability to reschedule and spread out secured debts throughout the course of a chapter 13 plan is another benefit of the chapter 13 bankruptcy alternative. This benefit excludes mortgages on primary residences. This could result in decreased compensation.
  • Third parties who share responsibility for “consumer debts” with the debtor are likewise covered by a particular provision of Chapter 13. Co-signers might be protected by this clause. 
  • Finally, chapter 13 operates similarly to a consolidation loan in that the borrower makes plan payments to a chapter 13 trustee, who subsequently disburses funds to creditors. While under chapter 13 protection, people cannot communicate with creditors directly.

Call us right away to learn more. The Cutler & Associates, Ltd. team will be happy to help you decide what steps to take next for your situation.

What are the reasons that you might not be qualified to file for Chapter 13 Bankruptcy? 

Although not everyone is eligible, Chapter 13 bankruptcy is a practical choice for certain debtors.

Chapter 13 bankruptcy is not permitted for businesses.

Chapter 13 bankruptcy cannot be filed in the name of a business, not even a single proprietorship. When a company needs assistance arranging its debts, Chapter 11 bankruptcy is recommended.

To declare bankruptcy under Chapter 13 as an individual, you must own a business. Debts from your company for which you personally are liable may be included in your Chapter 13 bankruptcy petition. A Chapter 13 bankruptcy case cannot be filed by stockbrokers or commodity brokers, even if they just wish to discharge non-business or personal liabilities.

Lacks of sufficient spare money. 

In order to qualify for Chapter 13, you will have to show the bankruptcy court that you will have enough income, after subtracting certain allowed expenses and required payments on secured debts (such as a car loan or mortgage), to meet your repayment obligations. Your plan must pay back certain debts in full, or the judge will not confirm (approve) it and allow you to proceed. The following sources of revenue can be used to finance a Chapter 13 plan includes some standard compensation, self-employment earnings and even from some sideline jobs, fees earned from sales or other projects, retirement benefits, Social Security advantages, benefits from workers’ compensation or disability (if you are), receiving alimony or child support, even royalties, rental fees, and especially if selling real estate is your main line of business, you can earn a lot from selling property. 

Your loans are way too high.

According to United States Courts, if your secured and unsecured obligations total more than $2,750,000, you are ineligible for Chapter 13 bankruptcy. A debt is considered secured if, if unpaid, you stand to lose a specific piece of property. The most prevalent types of secured debts are home loans and auto loans. The filing of a lien, also known as a notice of claim, on your assets by a creditor like the IRS, however, may also make an obligation secured.

You don’t file your income taxes on time.

In order to petition for Chapter 13, you must provide evidence that you submitted your federal and state income tax returns for the four tax years prior to the filing date of your bankruptcy. The court can delay the proceedings if you need more time to get your papers. However, your Chapter 13 lawsuit will be dismissed if you don’t present your transcripts for those four years.

Contact our Schaumburg Chapter 13 Bankruptcy Lawyer Now!

The only person who thoroughly understands the hardship brought on by accumulating debt in Schaumburg is a bankruptcy attorney. Despite what you may have heard, we can tell you that filing bankruptcy is not a terrible thing. Bankruptcy is one of the best options for a struggling consumer to get rid of their massive debts and start over. 

From the moment you receive your free evaluation until your bankruptcy procedure is complete, our attorneys at Cutler & Associates, Ltd. in Schaumburg and its several law offices in Oakbrook, Terrace, Skokie, and Aurora will offer you individualized, confidential legal advice.