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    Can You Pay Off Your Chapter 13 Plan Early?

    Last updated 5 days ago

    Bankruptcy is a perfectly legal and honest means of emerging from insurmountable debt. Even so, many people feel embarrassed by bankruptcy, and want the process to be over as soon as possible. The Chapter 7 bankruptcy process usually only takes a few months to complete, whereas the Chapter 13 bankruptcy process takes three to five years. If you have the means, you might be tempted to pay off your Chapter 13 repayment plan early—but is it worth it?  

    Chapter 13 Bankruptcy Basics

    Chapter 13 is a type of bankruptcy that allows income-earning debtors to reorganize their debt and it pay back over a period of three to five years. First, the debtor must come up with a repayment plan that details precisely how much the debtor will pay to his creditors. Some debts can be partially paid off, while others must be paid in full. Once the repayment plan is approved, the debtor begins making monthly payments.   

    Terms of Early Repayment

    Three to five years is a long time. If your circumstances change halfway through your repayment plan, you may wish to pay off the remainder of your repayment plan and free yourself from your obligation. However, doing so comes with a price. Your outstanding debt is discharged at the end of your repayment period—if you decide to end your repayment plan early, you will also have to pay the amount that would otherwise be discharged.

    Sticking to Your Repayment Schedule

    Though the idea of paying off your repayment plan early may sound attractive, you’re probably better off sticking with your plan to the end. If you have extra money, you might consider setting it aside so you can guarantee that your repayment plan will be paid off. After your repayment plan in finished, your outstanding debts will be discharged.

    There are a few exceptions that allow some people to end their repayment plans early without incurring additional expenses. For help identifying whether your case is an exception, call Cutler & Associates, Ltd. at (847) 505-0380. Our Aurora bankruptcy attorneys can help you get out from under your debt and start anew. 

    What Are the Most Common Types of Bankruptcy?

    Last updated 16 days ago

    The most commonly utilized types of bankruptcy include Chapter 7 and Chapter 13. Chapter 7 is known as a liquidation bankruptcy. If you choose this type, you’ll forfeit your non-exempt assets, which the trustee will then sell to pay off a portion of your debt. The remainder of your debt is discharged. If you own substantial assets, such as a home, and a regular income, your bankruptcy attorney may advise you to file a petition for Chapter 13 bankruptcy. Also known as debt reorganization, this type of filing restructures debt into a manageable payment plan. Debts that are not paid at the conclusion of the payment plan are discharged.

    There are other types of bankruptcy, including Chapter 12, which is appropriate for family farmers. The process of debt discharge under Chapter 12 is much like that of Chapter 13. Businesses most often file under Chapter 11, which enables them to keep some assets while adhering to a debt payment plan. Municipalities may reorganize their debt under Chapter 9.

    If you have any questions about what type of bankruptcy might be best for you, contact the veteran bankruptcy attorneys at Cutler & Associates, Ltd. Chicago-area residents can reach our locations in Aurora or Schaumburg at (847) 505-0380.

    What Bankruptcy Means to the Everyday Consumer

    Last updated 26 days ago

    For the everyday consumer, bankruptcy offers an opportunity to rebuild finances and start fresh. Bankruptcy itself has a long history. In its modern form; however, consumers may choose to file Chapter 7 or Chapter 13 bankruptcy. Your bankruptcy attorney can help you determine which type might be best for you, depending on your assets, income, and debts. If you’ve previously filed for bankruptcy, you’ll need to wait seven years before you can file again.

    Learn more about bankruptcy by watching this news clip. This expert explains the evolution of bankruptcy and the differences between Chapter 7 and Chapter 13. You’ll also learn how long a debt discharge will stay on your credit report.

    If you need a fresh financial start in life, you can learn more about filing for bankruptcy with help from Cutler & Associates, Ltd. Call our Aurora or Schaumburg office at (847) 505-0380.

    Tips for Working with Your Chapter 13 Bankruptcy Trustee

    Last updated 1 month ago

    When you file a Chapter 13 bankruptcy petition, a bankruptcy trustee will be appointed to your case. Throughout the proceedings, you and your bankruptcy lawyer will work closely with the trustee. The trustee will thoroughly review the petition, your proposed repayment plan, and all other necessary documents to ensure accuracy. The trustee is also responsible for conducting the meeting of creditors and administering your repayment plan. Since the trustee has an integral role in the process, it’s important to understand how to work with him or her.

    Understand the Trustee’s Limitations

    Your bankruptcy attorney can help you understand the role of the trustee in the proceedings, including what the trustee can and cannot do. For example, if you have a legal question about the process, the trustee is prohibited from answering it. Instead, direct all questions to your bankruptcy lawyer. If you need more information from the trustee in order to comply with a document request; however, the trustee can likely answer you or your lawyer.

    Submit Accurate Paperwork

    If the trustee detects a discrepancy in your petition and related documents, he or she may raise an objection. It’s important to submit accurate paperwork to ensure the process goes smoothly. Your lawyer can ensure your petition’s accuracy for you.

    Disclose All Recent Payments

    Before submitting your petition, your bankruptcy attorney is likely to ask you about any recent payments you’ve made to creditors, including family members. The trustee will thoroughly review your payment history and may decide to recover substantial payments. Disclose all payments made to creditors within the past 90 days and disclose all payments made to family members within the past 12 months.

    Comply with Document Requests

    The trustee may request additional documentation after your lawyer has submitted the petition. It’s important to comply fully with the trustee’s requests. If you do not have access to a particular document, the trustee may be willing to accept a different document that contains the same information.

    It’s challenging to handle the bankruptcy process on your own. By working with a bankruptcy lawyer at Cutler & Associates, Ltd., you can rest assured that your petition will be filed accurately. Call (847) 505-0380 to reach one of our convenient locations throughout Chicago, including Schaumburg and Aurora.

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