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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I am an Illinois resident and I am considering bankruptcy I ...

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I am an Illinois resident and I am considering bankruptcy I make about 50K a year am divorced a homowner with little equity but I would like to keep my house I have about 10k in credit card debt. If i claim chapter 13 will I loose my house also would the gov't take any tax refunds that I might get during my bankruptcy to pay down the bankruptcy?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 8 years ago.
Hello,

Have you resided in Illinois for the prior two years? How much equity is in your house? Are mortgage payments up to date?
Customer: replied 8 years ago.
Reply to FLAandNYLawyer's Post: I have lived in IL my whole life there is basically no equity in the home after refinancing and buying out my ex wife I am a month behind on the mortgage but I think I can catch up by the end of the year with my bonus from work. But what about my federal income tax refund would I get one if I claimed before the end of this year or would the gov't put it towards the bankruptcy1?
Expert:  Ellen replied 8 years ago.

Hello,

Thank you for your question. I am happy to assist you.

I do not see the advantage in a Chapter 13 bankruptcy. You appear to be better suited for a Chapter 7.

Here is why.

A Chapter 13 is a reorganization of an individual's debts. The typical reason for filing a Chapter 13 is to reorganize arrearages on secured debt. For example, if you were several months behind on your mortgage you might need to file a Chapter 13. A Chapter 13 can last up to 5 years.

A Chapter 7 is bankruptcy does not involve a reorganization or a payment plan. A debtor in a Chapter 7 receives a discharge of personal liability on most debts. If you are current on your mortgage you will be able to keep your home since it has little equity.

I hope that the information which I provided was helpful to you.

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

Thank you,
FLAandNYLAWYER

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Customer: replied 8 years ago.
Reply to FLAandNYLawyer's Post: I will accept your answer but I thought I made too much money for chapter 7 I make at least 50k a year and what about the income tax refund
Expert:  Ellen replied 8 years ago.
Hello,

To eliminate the refund, you can change your withholding from your employer so that you can use the money to catch your mortgage up.

You would need to pass a "needs test' to qualify for the Chapter 7, but with the planning of a good bankruptcy attorney you may be able to qualify.

If you file before the end of the year, your potential bonus may not be an issue.

I hope that this helps.

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THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

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