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    Understanding the Good Faith Requirement in Chapter 13 Bankruptcy

    Last updated 2 days 6 hours ago

    There are many requirements you must meet for your bankruptcy petition to gain the approval of the court. Fortunately, when you work with an attorney who specializes in bankruptcy cases, he or she will ensure that you meet all of those requirements, such as the good faith requirement. The good faith requirement involves the repayment plan that your bankruptcy attorney will submit to the court along with your Chapter 13 bankruptcy petition.

    Defining the Good Faith Requirement

    Under a Chapter 13 bankruptcy, you will repay a portion of your debt over a period of three to five years. The court expects you to designate all of your disposable income for this purpose and your repayment plan should reflect this. This is known as submitting the repayment plan in good faith. Your disposable income is any money that you do not need for basic living requirements, such as housing, transportation, and food. If the bankruptcy court and the trustee believe that you have submitted the repayment plan in good faith, they will approve it. Otherwise, the trustee may raise objections and the court may reject the plan.

    Identifying Possible Reasons for Objection

    Your bankruptcy trustee may raise objections if he or she believes you have not calculated your current monthly income accurately. Your current monthly income is the average income for the past six months just before your bankruptcy filing. If the trustee determines that you received a pay raise shortly before your bankruptcy filing or another type of increase in income, he or she may object to the repayment plan on the basis that you did not report it. Another possible reason for an objection is when the trustee believes you overstated the amount you need to support yourself and your family.

    At Cutler & Associates, Ltd., our bankruptcy attorneys have years of experience handling complex bankruptcy cases. We’ll work closely with you to ensure that you have a reasonable repayment plan that your bankruptcy trustee will accept. Contact our offices in Aurora or Schaumburg by calling (847) 505-0380 and ask about scheduling a free evaluation.

    Can a Debt Collector Target Your Social Security?

    Last updated 12 days ago

    For millions of Americans, Social Security is a vital source of income. However, Social Security alone is often not enough for people to live comfortably and pay off any outstanding debts. If you’re deep in debt, and Social Security is your only income, you might be worried that creditors will start garnishing your Social Security benefits. 

    Fortunately, Social Security benefits are largely exempt from garnishment. However, Social Security may be garnished if you owe child support or if you owe money to the government. In all other cases, banks must review the debtor’s account before approving garnishment—if less than two months’ worth of federal benefits are left in the account, the bank will deny the garnishment request. However, accounts with more than two months of Social Security payments may be garnished.

    If you’re struggling with debt and are having trouble finding a way out, contact the bankruptcy attorneys at Cutler & Associates, Ltd. Our firm has been providing bankruptcy services in Aurora, Schaumburg, and elsewhere in Chicagoland since 1990. 

    Talking with Creditors if You Can't Pay Your Bills

    Last updated 19 days ago

    Once you miss a payment, your creditors will start calling you and demanding money. If you don’t have the money, however, repaying your creditors simply isn’t an option.

    In this video, a certified public accountant discusses how to speak with creditors. She says it’s important to stay current on utilities, auto loans, and any debts that are set up against assets. If you can’t pay off your credit card, medical bills, or other unsecured debt, simply let the creditor know. The sooner you come clean to your creditor, the better chance you have of negotiating a repayment deal. 

    If your debt is insurmountable, you may need to file Chapter 7 or Chapter 13 bankruptcy. If that’s the case, the expert bankruptcy attorneys at Cutler & Associates, Ltd. will provide skilled assistance. Call our Aurora office at (847) 505-0380 if you have any questions. 

    Preparing for a Chapter 13 Confirmation Hearing in Bankruptcy

    Last updated 26 days ago

    If you have an income that is greater than the Illinois median for a household of your size, you may be eligible to file Chapter 13 bankruptcy. Chapter 13 bankruptcy permits you to repay your outstanding debts through a three-to-five-year repayment plan, and is generally a more favorable bankruptcy option from a creditor’s point of view. If one or more creditors take issue with your proposed repayment plan, however, you may have to go to a confirmation hearing. If so, here is how you should prepare.

    Review Your Repayment Plan

    After completing and submitting your Chapter 13 repayment plan, your creditors will have an opportunity to take a look. If your trustee or creditors identify an issue with your repayment plan, they will request a confirmation hearing. To adequately prepare for your confirmation hearing, consider reviewing your repayment plan for any glaring mistakes.  

    Identify Creditor Objections

    As you review your repayment plan, you should be able to identify your trustee’s or creditors’ objections. Most of the time, creditors object to repayment plans because they feel they aren’t receiving enough money. Trustees often request hearings if they don’t believe the repayment plan to be feasible. Identifying the central issue behind the objection will help you prepare your counterarguments for the hearing.

    Consult an Attorney

    If you haven’t done so already, it’s a good idea to hire a skilled bankruptcy attorney before the confirmation hearing. An attorney can shoulder the burden of preparation and represent your interests during the hearing. Having an attorney by your side and vastly increase your chances of having your repayment plan confirmed.

    If you’re planning on filing Chapter 13 bankruptcy, or have already done so and are facing a confirmation hearing, call Cutler & Associates, Ltd. at (847) 505-0380. Our Aurora bankruptcy attorneys can help you navigate the many difficult aspects of the bankruptcy process and help you find solid financial ground.  

    Can You Pay Off Your Chapter 13 Plan Early?

    Last updated 1 month 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. 

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