A recent potential client called the office and wanted to get started with a filing. At the meeting, we talked about a greater likelihood of Chapter 13 based upon the income of the debtor and his spouse. Today, the talk came up about Chapter7 once again. Here is what I do in these situations:
I will start the document preparation out as a Chapter7. I will put the client through the means test if necessary to determine if Chapter7 will work. If not, I will contact the client and advise as to why Chapter7 is not going to work. In the Northern District of Illinois, the Trustee’s office is very good about reviewing the cases for abuse. If the Trustee’s office feels that the person should be in a Chapter 13 repayment plan, they will bring the motion to dismiss or convert the case. They are simply following the case law and the bankruptcy code in general. There are some cases where a debtor can rebut the presumption of abuse. However, in most cases, the court will find on the side of the Trustee.
In some cases, a Chapter 13 will effectively help the debtor almost as much as a Chapter7. For example, in a case where a debtor is paying for a secured vehicle, credit card debts will be paid later at often a lower percentage. Further, if the credit card companies do not file claims, those debts are eliminated provided the debtor completes the bankruptcy plan. If this instance, a Chapter 13 is effectively very close to the result of a Chapter7. Of course, the time in a bankruptcy case vary drastically. Some cases can complete in four months while over the median Chapter 13 cases can last sixty months.
The advantage of a Chapter7 is that it brings finality to most debts and provides the fresh start that most people desire. Unsecured debt such as credit cards, medical bills and personal loans basically disappear forever. Other debts, such as student loans and recent tax debt remain. For detailed information about your particular situation, I invite you to call the office for a free, initial consultation. An experienced bankruptcy attorney will sit down with you and explain everything in detail. You can then make an informed decision regarding your financial situation. It will be the best hour of time that you spend. The firm has an office location at 19 S. LaSalle Street, Suite 707, in Chicago. You can call to schedule your appointment date and time.
