If your creditors are ruining your life, you have regular income, and you have a desire to pay your debts but are currently unable to do so, you may want to consider the relief offered by reorganizing your debts under Chapter 13 of the Bankruptcy Code.

A Chapter 13 rehabilitation immediately halts all creditor harassment including sheriff's sales and foreclosures, repossessions, wage garnishments and assignments, and it also protects friends and relatives who may have cosigned on a debt.

Normally, a Chapter 13 reorganization allows you to keep your property and proposes a plan to repay all or some of your debts over time. During your reorganization, which can take as long as 5 years, you make regular monthly payments to a trustee who is appointed by the Federal Government. The Trustee collects your money and then distributes it to your creditors. Under certain circumstances, you do not have to pay the full amount of certain debts such as medical bills, charge cards, past due utility bills, judgments, etc. The minimum your creditors are entitled to depends on a review of the type of claim a creditor has and the value of your savings and other property, as well as other factors, including the exemption allowed by Illinois law.

A Chapter 13 reorganization offers an individual the opportunity to repay missed mortgage payments over a period of approximately 2 years and allows most other debt to be repayed over a period of time not to exceed 5 years. Once a reorganization is filed, you are allowed to resume making regular monthly mortgage payments and your bank must accept these payments even if you are in serious default with your past payments. Your creditors cannot harass you as long as you are making your trustee payments and keeping your monthly mortgage, utility, insurance and other regular monthly living expenses paid.

If you are in a foreclosure situation, a reorganization can sometimes be used to buy time. Additional time may allow you to sell your real estate in order to cash out the equity you have in the property rather than losing it at a sheriff's sale. If you own your own business, it is possible to include your business debts in your reorganization as long as you are personally responsible.

If you work for someone else, it is not necessary for your employer to be notified of your Chapter 13. At Hitchcock & Associates we strongly believe in protecting your confidentiality.