Tag Archives: Can I discharge child support

How is Chapter 7 different from Chapter 13 Bankruptcy?

When consumer confidence is high and the financial markets are doing well it may be time to drop some of your financial dead weight to clear space for new jobs, more money and less debt. Many people have added it all up and said, “If I only had this amount of extra money, I could clear everything up and actually start getting ahead.” What do you do about those bad decisions or unfortunate situations that were not your fault, but still have a hefty price tag? When you are saddled with debt you cannot pay, you may start thinking about bankruptcy options. Do not be dissuaded by the anti-bankruptcy ads on television, paid for by debt repayment and restructuring companies. Most of them do not get people the fresh start they need to really be successful. If you want to get out of debt and do it right, there are two consumer bankruptcy options for you, Chapter 7 discharge and Chapter 13 restructuring.

What are the differences between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 is a liquidation bankruptcy. When you qualify for a Chapter 7 liquidation (or think of complete discharge) you can literally wipe the slate clean. Note that only certain debts may be discharged, such as court judgments against you, credit card debts and loans you cannot pay. You cannot however get rid of child support obligations, student loans or certain tax or municipal fines.

Chapter 13 is a reorganization bankruptcy. If you do not qualify for a Chapter 7 discharge, you may be able to file a Chapter 13 petition for bankruptcy. You will be able to repay a portion of your debts, every month, over time. In a Chapter 13 you get to keep all your property, including non-exempt assets. When you have the income to pay debts, but need some time to spread it out and get caught up, a Chapter 13 can be your best path to financial freedom.

Note that when you file a Chapter 7 or Chapter 13 Bankruptcy, the Automatic Stay provision kicks in which prevents bill collectors from doing anything to collect a debt while you are in bankruptcy. In a Chapter 13, you pay the Bankruptcy Trustee every month and they make the negotiated payments on your debts. For people who want to keep their house and other valuable assets and still get bankruptcy relief, Chapter 13 is a great thing.

How do I know whether I qualify for Chapter 7 or Chapter 13 Bankruptcy?

To qualify for a Chapter 7 Bankruptcy, and get a full discharge of qualified debts, you must show financial need and hardship through a means test calculation. Your bankruptcy attorney can do the math and let you know whether you qualify. In the event, you do not qualify for a Chapter 7, you can always file a Chapter 13 bankruptcy instead. Let’s say you make just a little bit too much money or have a little more equity in your home you want to preserve, the Chapter 13 will still help you and you will repay only a portion of your debts over time.

How long will a Chapter 7 or a Chapter 13 Bankruptcy take to be completed?

A Chapter 7 Bankruptcy can be filed and discharged within several months. Your bankruptcy attorney collects all the necessary information, files the petition, appears with you at the Notice to Creditors Meeting, after which time you wait to see if any of your creditors file any objections to your bankruptcy. In a few months, you have a full discharge. In Chapter 13 Bankruptcy, you can get caught up on missed payments and non-dischargeable debts over a three to five-year period.

What steps can I take to make sure I have good credit after my bankruptcy case?

When preparing for credit worthiness after bankruptcy, remember that the only thing that matters is what you do with your finances after the bankruptcy. Your credit score determines how risky it may be to lend you money or credit. To reduce that risk, many companies offer secured credit cards. Anyone can get a secured credit card by paying a deposit of $200. If you never pay the bill, you forfeit your deposit. Without a bunch of missed monthly payments, there is nothing to negatively affect your credit score. Keep up with the secured card and you will start receiving regular credit card offers in no time. Buy a new car or a new home in a handful of years after a bankruptcy. There are many people who tell success stories about the new opportunities they seized after getting out from behind the eight ball.

If you have a question about any of the bankruptcy details mentioned in this article, it costs you nothing to call Joseph Wrobel, Ltd. and find out what bankruptcy law may mean to your financial future.

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

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Chicago bankruptcy questions and answers with Joseph Wrobel, September 2015

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress. 

Click/tap here to listen to the podcast now!

Topics covered in this 30 minute show:

  • What type of debts does a bankruptcy eliminate, and what debts will I have to keep?
  • How long does a debt need to exist to include it in my bankruptcy filing?
  • Are there any special rules in bankruptcy for home owners association dues?
  • How soon can I file for bankruptcy if I need to use the bankruptcy laws more than once?

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973 he earned a JD from DePaul University Law School.

Visit our Chicago Bankruptcy website online for more about the firm. You may also contact Joseph Wrobel for more information at (312) 781-0996 and by e-mail at JosephWrobel@ChicagoBankruptcy.com

The dangers of do-it-yourself bankruptcy: There is no substitute for professional experience

It seems to be human nature for people to ask questions of their friends and neighbors first, before seeking the advice of professionals. Nowadays, people also read news articles, blogs and materials on websites to do their research before making a decision on a significant life event. This is particularly true in legal matters affecting the public. This is particularly evident in bankruptcy law.

Do you or someone you know have experience with a bankruptcy case? How long ago was it? What were the facts and circumstances? The responses to the last two questions could lead into an exhausting set of examples where what was true for one person at one time, may be quite different from the next. Take into consideration that your friend or neighbor, telling you about their success in bankruptcy, might leave out some significant details.

A “routine” new client meeting comes with a bit of a surprise to the “well researched” new client.

Consider the following scenario: A man makes an appointment with the bankruptcy attorney because he is out of work, has injuries, and is temporarily unable to work. The man reports that he lives in the city, he rents an apartment and does not own a car or any significant assets other than personal items and a small amount in a bank account. He reports he was injured and lost his job, received workers compensation benefits that ran out and he is receiving harassing calls from credit card companies and collection agents, generally. The man suggests his is a simple bankruptcy that should be open and closed so he can move forward and get a fresh start. Sometimes, however, it is not that easy.

As the attorney asks the man to list all the creditors calling him to collect, things seem pretty normal until he mentions that the local State’s Attorney is after him for child support arrears and he may be facing jail time for failure to comply with the court’s orders to seek employment, keep a job diary, etc. Unfortunately, the attorney reports, you cannot get a bankruptcy discharge of child support payments, maintenance, and support orders entered by a family court.

It is easy to make wrong assumptions in good faith if you do not know the law.

In this case, the man seeking to avoid child support payments might have legitimately assumed that child support debts are like any other debts and he would be able to discharged. He may have honestly believed they would be included in the bankruptcy and he could start out with a clean slate, no longer being in hot water with the State’s Attorney seeking to collect for monies already paid by the State Disbursement Unit to the child support recipient parent. This could have turned out poorly for this man had he attempted to navigate the bankruptcy courts on his own without an attorney.

Ignorance of the law is not justification for breaking the law. If the individual in our hypothetical had filed a petition for bankruptcy on his own and withheld information about his child support obligation, he could have been in trouble for committing a fraud on the bankruptcy court. Otherwise, if he had included the child support amounts in his petition, he would have likely been promptly notified by the bankruptcy court that this was not an option.

Don’t get caught in a surprise moment. Take the time to get proper legal advice.

In over 40 years of bankruptcy practice, Joseph Wrobel has heard it all, or close to it. If you do not qualify for bankruptcy, or the only reason you want to file bankruptcy is to accomplish something you cannot, like discharging child support, Joseph Wrobel will tell you in a free initial consultation to help you determine if Chapter 7 or 13 bankruptcy options are available and likely to solve your financial troubles.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’sFacebook page and Follow Joseph Wrobel. Ltd. onTwitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.