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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 12204
Experience:  JD, MBA
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Can I file chapter 13 before Im sued.

Customer Question

Can I file chapter 13 before Im sued.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 2 years ago.
Hello and thank you for the opportunity to assist you. My name is ***** ***** I will do my very best to answer your legal questions.
I don't know anything about your specific situation, obviously. However, generally speaking, a person may file for bankruptcy prior to being sued in order to prevent the lawsuit from being filed.
Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied.
Customer: replied 2 years ago.
Well I Have 23,000 dollars in my back account, and Im worried about losing the money. If I file Chapter 13 will I have to pay monthly payments that total 23,000 over a 3-5 year plan. How can my money in a Chapter 7.
Expert:  TJ, Esq. replied 2 years ago.
Hi again.
Yes, it's true that your money will be taken if you file for bankruptcy. You can only keep property that you can exempt, but in Illinois, you can only exempt $200 in cash. The rest would be taken by the bankruptcy trustee to pay to your unsecured creditors.
That would be the case in both Chapter 13 or Chapter 7.
Customer: replied 2 years ago.
I thought chapter 13 lets you keep your assets, even the money in your bank account
Expert:  TJ, Esq. replied 2 years ago.
Hello again.
Sorry, we are having a little miscommunication. I don't think I explained my prior answer well enough.
What I meant was yes, you are correct that you would have to pay for that $23,000 in monthly payments. In other words, you would not be able to exempt that money and keep it without making such payments.
Does that help to clarify?
Customer: replied 2 years ago.
Okay so basically Chapter 13 will force me to pay that 23,000 over a 3-5 year plan. When I reach the end of the plane the rest of the debt is erased?
Customer: replied 2 years ago.
Can u start paying monthly payments even towards unknown amounts towards creditors.
Expert:  TJ, Esq. replied 2 years ago.
Hello again.
After you reach the end of the plan, then your debts are discharged. Some creditors may have been paid in full through the plan (for example, the IRS must generally be paid in full), while other creditors may have been paid just pennies on the dollar. Whatever remains is discharged if the debt is dischargeable. Remember, some debts are not dischargeable. For example, student loans are not generally dischargeable.
The only creditors will be paid in the plan are those creditors who file a proof of claim. Accordingly, it is very important that you list all of your creditors in your bankruptcy schedules. If you do not list a creditor, then that creditor may not learn about the bankruptcy. If the creditor does not learn about the bankruptcy, then you may still be responsible for that creditor's debt after the bankruptcy discharge since you didn't provide notice by listing the creditor. On the other hand, if you list a creditor, and that creditor does not file a proof of claim, then that debt likely would be discharged even though the creditor got nothing through the plan. Once the creditor is notified of the bankruptcy, it is that creditor's obligation to file a proof claim.
So, the bot***** *****ne is that there won't be any unknown amounts. You will know exactly what the creditors claim by reviewing their proofs of claim.
I hope that helps. Let me know if you need further clarification, and please remember to provide positive feedback. Thank you.

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