In discussing the thousands of Illinois homeowners needing foreclosure help throughout the week, we concluded on Wednesday by noting the benefits of filing Chapter 13 bankruptcy for homeowners who are underwater on their mortgages. However, we noted that individuals need to have the income necessary to make Chapter 13 repayment plans work. Many recent reports suggest that households throughout Illinois are struggling to keep up with their bills after seeing declines in their incomes.
On September 20, 2012, the Chicago Sun-Times reported that the Census Bureau estimated that the median household income of Chicagoans was $43,628 in 2011. This figure was nearly $7,000 less than the national figure of $50,502. According to the Chicago Tribune, the 2011 median household income was “$4,000 less than in 2009 and part of a steady decline over the past three years.”
While these realities make it difficult for many homeowners to have the income necessary to enter a Chapter 13 repayment plan, the good news is that individuals who are underwater on their mortgages and have lower incomes may still be able to file Chapter 7 bankruptcy . Unlike Chapter 13, individuals filing Chapter 7 will not be able to save their homes. However, they can use Chapter 7 to walk away from the house owing nothing. Also, individuals filing Chapter 7 will be able to live rent-free for a few months and discharge most or all of their unsecured debt.
If you are uncertain whether Chapter 7 or Chapter 13 is the best option for you and your family, our Chicago bankruptcy attorneys can help when you fill out the form on this page or contact our firm at (866) 930-7482.
Benjamin Brand Services – Chicago bankruptcy lawyers