Chicago Chapter 13 Bankruptcy Lawyers | Debt Consolidation Attorneys Cook County Kane County DuPage County

Cook County Debt Consolidation Lawyers Offering Answers to your Bankruptcy Questions

If you have retained Ledford & Wu for a Chapter 13 bankruptcy and you have questions about your case, this is the place to find many of your answers. Below is a list of the most common questions and concerns of Chapter 13 clients. If, however, after reading the information provided, you still have questions, call the office at 312-294-4405 for further information. We have put this list together for your convenience. You are; of course, always welcome to call the office with any questions you may have regarding your case.

Creditors are still calling me/sending me notices even though my case has been filed

When your case is filed with the court, our office will fax notice on the same day for imminent repossessions, sheriff sales of home, utility shut offs, and active or imminent wage garnishments. All other creditors will receive their first notification of filing by mail from the bankruptcy court itself within 7-10 days from the date your case is filed. Within 2 weeks from filing, the calls and letters should taper off. Most creditors, however, are large corporations and often do not immediately notify their collections departments that a case has been filed so you may still have one or two who will call or send notices. The best way to deal with these stragglers is as follows:

On your instruction letter from our office which you will receive within 2-3 days of filing, is your docket number with the Bankruptcy and a copy of the Notice of Automatic Stay which notifies creditors that you have filed and that their actions must stop. When a creditor calls, pick up the phone and tell them you have filed Chapter 13. Give them your docket number and our phone number and tell them they are not allowed to call you again. If you receive a collection letter, use the return envelope to send them a copy of the Notice of Automatic Stay or call the phone number provided on their letter to tell them you have filed.
If a creditor calls your or sends you a notice after you have given them your docket number or sent them a copy of the stay, keep a log and contact our office so we can intervene. We need to know which creditors it is, when they called, a phone number where we can contact them, and a contact person's name, if any.
If, after we have contacted the creditor, they continue collection activities, keep a log of these activities and contact us as we may have to file a motion in court to stop them.

I forgot to list something on my paperwork

If you forgot to list a creditor:

Fax us a copy of the bill or, at the very least, the creditor's name, address, account number and amount owed.
If your case has been filed, you must provide a money order for $26.00 payable to "LW Court Costs" before the creditor can be added because we must pay the bankruptcy court to file an amended list of creditors.
If the debt was incurred after your case was filed, it cannot be added (except IRS debt).
If it has been more than 90 days since your Meeting of Creditors, we can add the debt and the creditor will be notified but it is too late to have them paid through the plan. You do not, however, have to pay them until the bankruptcy is completed. They cannot collect from you or garnish your wages while you are in bankruptcy.

If you forgot to add property:

We need the specifics. If it is real estate, we need to know the address and who is on title. If it is a vehicle, we need to know the year, make, model, mileage and who is on title. If it is other personal property, we need to know what it is, where it is held, the value and who owns it. Write out an explanation with the requested information and fax it or mail it to us.

If you forgot to add something else (income, expenses, co-signers, etc.)

Prepare a detailed written explanation of what needs to be added and fax it or mail it to us.

A creditor has garnished my wages/bank account

My case has not been filed yet-

If we have not yet filed your case, we cannot stop a wage garnishment, unfreeze a bank account or recover funds deducted from your bank account until your case is filed. If you owe us fees or documents before your case can be filed, you need to contact us and make arrangements to provide the missing information and make payment so we can prepare your petition for you to sign and file as soon as possible. Once your case is filed, we can stop wage garnishments and unfreeze your bank account. We cannot recover funds already garnished or seized from an account.

Unfortunately, it occasionally happens that a creditor takes action post-filing because they claim not to have received notice of your bankruptcy or because they just don't care or understand the law. Once your case is filed, you are protected and actions taken by creditors that violate the automatic stay in your case usually can be reversed.

My case has been filed-

If your wages are garnished post-filing, we need a contact person and phone number for your payroll department and we need to know which creditor garnished your wages. In addition, we need a copy of the pay stub(s) showing how much was garnished and when. We will contact payroll to make sure they do not send any future monies to the creditor and, if they have not yet sent the money deducted to the creditor, have them return it to you, usually in your next pay check. If the money has already been sent to the creditor, we will contact the creditor and request return of the funds as soon as possible. Keep in mind, however, that a judgment creditor may still be able to garnish your wages that have been earned, although not yet received by you, as of the date of the bankruptcy filing.
If your bank account is frozen or money seized after your case is filed, we need to know which creditor took the action and what bank the account is with. We also need a contact person and phone number for your bank. We will contact the bank to prevent future deductions and to have the account released if it is frozen. We will contact the creditor and make sure they return any funds seized post-filing.

My car has been repossessed

My case has not been filed yet-

There is no guarantee that we can recover the vehicle. However, if, within 20 days of the repossession, you can provide our office with everything needed to get your case filed and your case is filed, we will contact the creditor and try to recover the vehicle. Sometimes, we can go to court and obtain a court order requiring release of the vehicle. You may have to pay the repo cost and storage fees when you pick up the vehicle.
Contact us immediately upon discovering the car has been pulled so we can advise you and contact the creditor to let them know that a Chapter 13 filing is imminent.

My case has been filed-

Unfortunately, it occasionally happens that within the first few days after a case is filed, a car is repossessed because the finance company claims not to have received notice of your bankruptcy or because they just don't care or understand the law. Once your case is filed, you are protected and if your car is taken, we usually can recover it. (If you have been in your case for some time and your car is repossessed pursuant to an order modifying the automatic stay, we cannot recover the vehicle.)

Notify us immediately that the car has been taken.
Provide us with a phone number for the finance company and, if you have it, any information about the repo company.
We will contact the finance company or their attorneys immediately and demand return of the vehicle. We will then contact you and let you know how the vehicle can be recovered.
Once you have the vehicle back, inspect it for any damage or missing personal items so we can notify the creditor immediately and take action in court if necessary.

When is my first plan payment due?

Your first plan payment is due 30 days from the date your case was filed. You will receive an instruction letter from our office shortly after your case is filed, with detailed instructions for making your payment.
If you have agreed to payroll control, the deductions from your pay may not start for 4-6 weeks after filing. You are ultimately responsible to make sure every payment is received. Until payroll control deductions begin, you should send the appropriate amount directly to the Trustee yourself using a money order or cashier's check and regular U.S. mail only. Refer to your instruction letter for details.

When is my first post-filing mortgage/car payment due?

If you are paying your mortgage payments and/or car payments directly to your creditors, outside the plan, you must pay the mortgage/car payment on the next due date after your bankruptcy is filed. For instance, if your mortgage/car payments are due on the 1^st of each month and your bankruptcy is filed on March 2nd, your first mortgage/car payment will be due April 1^st. If, however, your payments are due on the 15^th and your Bankruptcy is filed on March 1^st, your first mortgage/car payment must be paid by March 15^th.

If your current mortgage payments and/or car payments are included in your Chapter 13 plan payment, you do not need to make direct payment to the lender(s). Just pay the trustee, and the trustee will pay those for you. If you are not sure whether your plan payment includes current mortgages and/or car payments, please be sure to call us for clarification.

I cannot attend my Meeting of Creditors at the Trustee's Office on the scheduled date

We strongly discourage you from missing your original scheduled Meeting of Creditors for anything but an emergency or serious conflict that is unavoidable.
If you have no choice but to miss your original meeting date, notify us as soon as you know you cannot be there. We will request a continued date. This date is usually one week or two weeks from the date of the original meeting.
You MUST attend the continued meeting. If you do not, the trustee will file a motion to dismiss your case with the court.

I have received an Objection to Confirmation from one of my creditors

Do not panic. These are very common and are filed in almost every case.
When we design your plan and file it, much of it is estimated based on the information you provide to us because there is no way for us to know the exact amount owed on a debt at the moment we file your case or the exact amount that you may be delinquent in mortgage payments, etc.
The most common objections are filed by mortgage companies because your pre-filing default is higher than estimated and by car finance companies because the car value, interest rate or loan balance is different than what we estimated.
We receive a copy of any objections filed, too. We make any amendments necessary in your case after your Meeting of Creditors, including amendments needed as a result of an objection.
If the amendments required by the objection effect the length of your plan or the amount of your monthly plan payment, we will notify you prior to making the changes to discuss the changes with you and obtain your approval.
If we review the objection and determine that the creditor is wrong, we will contact the creditor prior to the confirmation hearing and ask them to withdraw the objection. If they refuse, we will argue it before the judge.

I have received a Motion to Dismiss my case from the Trustee

The trustee will file a motion to dismiss, generally, for three reasons: 1) your case has not been confirmed yet and they are waiting on documents from our office or you, 2) you have fallen behind in your plan payments, 3) your plan cannot pay all of your creditors the minimum amount they are supposed to be paid under the plan within 60 months.

If you receive a Motion to Dismiss because the trustee claims they have not received documents- do not worry. We deliver your documents to the Trustee as required well within the time limit imposed by the Bankruptcy Code. The Trustee sometimes files this motion before the documents are actually due. Unless you receive a phone call or letter from us requesting further documents from the Trustee, you do not need to do anything if you receive one of these motions. We have the matter taken care of.

If you receive a Motion to Dismiss because you have fallen behind in plan payments-

If you believe you are current and the Trustee is wrong, contact our office to provide proof of all plan payments in the form of receipts (if you pay the Trustee direct) or pay stubs showing consistent deductions (if you are on payroll control). We will compare your receipts/pay stubs against the Trustee's record and contact you if we find that you are behind.
If your employer has not deducted from your pay or you have not sent all of your payments and you, therefore, agree that you are behind, contact our office to let us know:
- What caused you to fall behind,
- When you can pay the default to become current again, or
- You are unable to pay the full default amount but can resume regular plan payments.
If you are able to obtain the funds to cure the plan default, we will set an appointment for you to drop the funds off at our office so we can then present the funds in court and have the motion withdrawn.
If you are able to obtain the funds to become current but not by the date set for the hearing, call and let us know. We will appear in court to request a continuance on your behalf so you can obtain the funds and have the motion withdrawn at the next hearing.
If you have no way of obtaining funds to cure the default even with additional time and you have a reasonable excuse for why you fell behind, we will review your case to see if the default can be deferred to the end of the plan. If that is possible, we will file a motion with the court and you will need to drop off at least on regular plan payment at one of our offices before the hearing on our motion to have your case reinstated to good standing and the default deferred.

I have received a Motion to Modify Automatic Stay from my mortgage company

A Motion to Modify Automatic Stay means your creditor is asking the court to remove your home from the Court's protection so the creditor can proceed with foreclosure because you have fallen behind in your post-filing payments to the creditor or Trustee.

If the mortgage company is right and you are behind by the amount they claim in their Motion, you must contact our office to let us know if you have any funds to get caught up. If you have all of the funds necessary to get caught up, we will make an appointment for you to drop off a money order or cashier's check at one of our offices for us to give to the mortgage company's attorneys at the hearing on their motion.

If you have some but not all of the funds needed to become current, you will need to drop a money order or cashier's check at one of our offices prior to the court hearing and then we will ask for a continuance to get more time for you to obtain the remainder of the funds necessary to cure the default. Usually, we can get an additional 2-3 weeks if we have half or more of the funds needed to cure the default.

If you have most of the funds necessary to cure the default and cannot obtain the rest within 2-3 weeks, you need to drop off a money order or cashier's check for the amount that you have at one of our offices and then we can try to negotiate a repayment order with the mortgage company's attorney for the remaining default. A repayment order will generally stipulate that you must cure the remaining default by making an additional payment to the mortgage company, along with your regular monthly payment, for the next 6 months. This is the least desirable way to resolve a Motion to Modify Stay because if you do not comply exactly with every provision of the order, the stay will be lifted automatically without a hearing.
If you believe the mortgage company is wrong and you are current or not as far behind as the motion alleges, you must provide our office with copies of every payment made to the mortgage company from the date your bankruptcy was filed, in the form of money order/cashier's check, Quick Collect receipts or cancelled checks, and any additional funds owed at the time to the mortgage company in the form of a money order or cashier's check. We will then review your proof of payments and forward them to the attorneys for the mortgage company. The burden to prove that you are current is on you so the proof of payments must be receipts or cancelled checks. Bank statements or copies of money orders or checks are not sufficient. If the mortgage company was wrong and you were completely current at the time the motion was filed, the motion will be withdrawn and you will not have to pay fees for the mortgage company's attorneys. If you were behind at the time the motion was filed but the situation is resolved by payment from you or by a repayment order, you will have to pay the mortgage company's attorney's fees.
If the mortgage company is right and you are in default and you have no way at all of becoming current, the stay will be lifted. Once the stay is lifted, the mortgage company can proceed with foreclosure but you can also contact them and deal with them directly to try to work out a loan modification or repayment agreement. You may also try to refinance your home to prevent losing it to foreclosure. Refer to the refinancing question for instructions on how to proceed.
If you can bring in a cashier's check or money order to our office in the amount needed to be completely current post-filing within 10 days of the stay lift, we will file a motion to vacate the stay lift and try to have the home put back into the bankruptcy.

I have received a Motion to Modify Stay from my auto finance company

A Motion to Modify Stay means your creditor is asking the court to remove your vehicle from the court's protection so the creditor can proceed with repossession because you have fallen behind in your post-filing payments to the creditor or Trustee.

If the auto finance company is right and you are behind by the amount they claim in their Motion, you must contact our office to let us know if you have any funds to get caught up. If you have all of the funds necessary to get caught up, we will make an appointment for you to drop off a money order or cashier's check at one of our offices for us to give to the auto finance company's attorneys at the hearing on their motion. You will also need to provide proof of current, valid, full coverage insurance on the vehicle with the finance company listed as the lienholder.

If you have some but not all of the funds needed to become current, you will need to drop a money order or cashier's check (along with proof of full coverage insurance) at one of our offices prior to the court hearing and then we will ask for a continuance to get more time for you to obtain the remainder of the funds necessary to cure the default. Usually, we can get an additional 2-3 weeks if we have half or more of the funds needed to cure the default.
If you believe the auto finance company is wrong and you are current or not as far behind as the Motion alleges, you must provide to our office, copies of every payment made to the auto finance company from the date your Bankruptcy was filed in the form of money order/cashier's check/Quick Collect receipts or cancelled checks and any additional funds owed at the time to the auto finance company in the form of a money order or cashier's check. We will then review your proof of payments and forward them to the attorneys for the auto finance company. The burden to prove that you are current is on you so the proof of payments must be receipts or cancelled checks. Bank statements or copies of money orders or checks are not sufficient. If the auto finance company was wrong and you were completely current at the time the Motion was filed, the Motion will be withdrawn and you will not have to pay fees for the auto finance company's attorneys. If you were behind at the time the motion was filed but the situation is resolved by payment from you or by a repayment order, you will have to pay the auto finance company's attorney's fees.
If the auto finance company is right and you are in default and you have no way at all of becoming current, the stay will be lifted. Once the stay is lifted, the auto finance company can proceed with repossession but you can also contact them and deal with them directly to try to work out a payment arrangement.

I have received a Notice of Assignment or Transfer of Claim

This is a document sent out by the bankruptcy court when one of your creditors sells your account to another creditor. The new creditor will then be the one who is paid by the Trustee. This has no effect on your plan length or payment amount. You can file it away to keep with your records but other than that, you do not need to do anything with it.

My mortgage company has offered a loan modification but they need your permission to speak to me

Most mortgage companies have an authorization form already prepared. Have them fax it to 312-294-4410. We will sign it and fax it back to them.
If the mortgage company does not have their own form, get their fax number and contact person and call us with the information. We will prepare an authorization form and fax it to them.
Keep in mind that a loan modification may require court approval, depending on the exact terms, which means we will have to file a motion. In order to file that motion, we will need the terms of the modification in writing from the mortgage company. We will not agree to anything that requires that the home be removed from the bankruptcy court's protection as that is often just a way for the mortgage company to get you to give up your right to court protection so they can more easily foreclose at the first sign of default by you in payments.

My income has decreased or my expenses have increased, making me unable to pay my plan payment

A significant and permanent change to your income or expenses can often result in a situation where you are unable to continue to meet your obligations under the Chapter 13 plan. We may be able to offer relief to you and keep you in your Chapter 13 by reducing your plan payment. If a reduced payment is necessary and possible, we must file a Motion to Modify Plan on your behalf. Below are instructions for you to follow so that we can evaluate your case to see if modification is possible and so we can prepare the Motion.

Call our office first to find out if a plan modification is possible since we sometimes can make a quick determination. If we determine it is possible, proceed to the next step.
Go to the forms section of this website and print and fill out the income and expense forms.
Fax the completed income and expense forms along with your most recent pay stubs and those of your spouse if applicable as well as proof of any other household income (i.e. social security award letter, pension statement, proof of rental income or family contribution, proof of child support, etc.) to our office. Please also include a short letter of explanation regarding your change in circumstances. If your expenses have increased, please include any proof you have in the form of bills or receipts.
We will review your fax and then the claims in your case remaining to be paid and the amount of time you have left to complete your plan. If you have a legitimate change of circumstances and the law allows you to modify the plan under those circumstances, we will contact you to let you know how much your payment can be reduced and we will proceed with filing the motion. If your plan payment cannot be reduced, you will receive a letter or phone call from our office explaining why and presenting any alternative options you may have.

I need a new vehicle

Buying a vehicle on credit while you are in Chapter 13 requires court approval. You may think that you will not be able to finance a new vehicle while you are in Chapter 13 but that is not necessarily true. If you can demonstrate to the court that a new vehicle is necessary, that you can afford it and that the financing terms are reasonable, the court will likely approve the purchase.

There are two most common situations that lead to needing a new vehicle when you are in Chapter 13, 1) your vehicle gets old and quits running, and 2) your vehicle is totaled in an accident. Below are instructions regarding how to deal with each situation.

If you are paying for a vehicle through the plan and it needs to be replaced

If you are paying for a vehicle through your Chapter 13 plan and it quits running and fixing it would be more expensive than the vehicle is worth, you may need to replace it by financing another car.

Shop around for someone to finance you. You will most likely not get financing at the first dealership you walk into. There are, however, plenty of dealerships out there that will work with you while you are in a Chapter 13. You just have to shop around some.
We need estimated financing terms in writing from the dealer. This must include the loan amount, interest rate and monthly payment amount for which you've been approved.
The court is unlikely to grant permission to purchase a vehicle if the payment exceeds $500 per month.
Once you have the loan terms in writing, forward them along with your most recent pay stubs and other proof of household income and an explanation as to why you need the new vehicle to our office and, if the terms are reasonable, we will file a motion with the court for approval to proceed with the financing.
Once the new vehicle has been purchased, you will be responsible for the payments directly to your new finance company and must maintain full coverage insurance at all times.
The vehicle that is being paid through the plan that no longer runs will have to be returned to the creditor who will dispose of it and credit you for any money they receive for salvage. The remainder will still have to be paid through your plan. You may have to have the vehicle towed to the dealership where it was purchased to get rid of it as you do not have the title and cannot dispose of it in any other way.

If you are paying for a vehicle through the plan and it is totaled in an accident-

Contact your insurance company and see if your policy includes a provision for substitution of collateral. If it does, follow their instructions and, if the finance company requires a motion, notify us and we will file the appropriate motion for you.
If your insurance does not provide for substitution of collateral, they will have a check to issue for the vehicle. Have them contact your Trustee for the payoff balance. They will then send that check to the finance company. If it is enough to pay off the claim, the finance company must withdraw their claim so the Trustee will not pay them any additional funds. If the insurance money exceeds the payoff amount, the remainder of the funds can be sent to you towards the purchase of a replacement vehicle. If the insurance does not cover the payoff balance, the finance company will file an amended claim to reduce the amount owed through the plan and the Trustee will continue to pay the claim until it is paid in full.
If you wish to finance a replacement vehicle see 1-6 in the section above.

If you are paying for a vehicle directly that stops running

You must return the vehicle to the creditor so it can be disposed of since you do not have the title.
Your finance company should then give you credit for any funds they receive for the vehicle. We will then have to file a motion to modify your plan to pay the remainder of the balance through the plan or you will have to pay it when your plan is over.
If you wish to finance a replacement vehicle see 1-6 in the first section above.

If you are paying for a vehicle directly that is totaled in an accident

Contact your insurance company and see if your policy includes a provision for substitution of collateral. If it does, follow their instructions and, if the finance company requires a Motion, notify us and we will file the appropriate motion for you.
If your insurance does not provide for substitution of collateral, they will have a check to issue for the vehicle. Have them contact your auto finance company for the payoff balance. They will then send that check to the finance company. If the insurance money exceeds the payoff amount, the remainder of the funds can be sent to you towards the purchase of a replacement vehicle. If the insurance is not enough to cover the payoff balance, we will have to file a Motion to Modify your plan to pay the remainder of the balance through the plan or you will have to pay it when your plan is over.
If you wish to finance a replacement vehicle see 1-6 in the first section above.

I want to sell/refinance my home

Refinancing or selling real estate is possible even while you are in Chapter 13 Bankruptcy. We do have to file a motion with the court for permission but as long as the terms of the refinancing or sale are favorable, these motions are usually granted without too much difficulty. We need the following in order to file the Motion:

(for sale) copy of a real estate contract signed by the buyer or (for refinancing) loan application outlining the terms of the refinancing (the Court is reluctant to grant motions where the new mortgage has an adjustable rate, a balloon or an interest rate higher than 9% so try to avoid those terms);
if you have a mortgage on the property, a payoff letter from the mortgage company (one for each mortgage company if you have more than one);
if you wish to pay off the balance of your Chapter 13 plan, a payoff letter from the trustee;
a closing statement or good faith estimate showing the mortgage(s), lien(s), fees and costs to be paid out of the sale proceeds;
(if your case was filed on or after 10/17/2005) a copy of a Certificate of Debtor Education. You may be able to complete the debtor education through your trustee for free (please contact your trustee. Tom Vaughn: 312-294-5900; Marilyn Marshall: 312-431-1300; Glenn Stearns: 630-577-1313), or you may do so through Greenpath Debt Solutions (866-332-8435) for a fee; and
(if your case was filed on or after 10/17/2005) a signed Debtor's Declaration Regarding Domestic Support Obligations (see the forms section of this website; in a joint case, each must sign a separate one)

It is YOUR responsibility to make sure that we receive all the documents. We cannot file a motion in court without them. Incomplete documents may cause delay or denial of the motion. You may fax these documents with a cover letter to 312-294-4410. Please note that the court routinely denies motions for approval of refinancing if the new mortgage is an adjustable rate mortgage (ARM) with a high loan origination fee. The court may require any and all nonexempt proceeds from the sale or refinancing, less fees and cost, to be paid to the trustee, up to the balance of the allowed claims. By requesting us to seek court approval, you acknowledge that you have been informed of the above. Please note that we need 30 days from the receipt of all documents to have the motion heard and granted.

My payroll deductions have not started/are the wrong amount/have stopped

If you have agreed to payroll control, we submit an order to the Judge at the beginning of your case which he signs and the Trustee then sends to your employer. It is your responsibility to review your pay stub every pay period and make sure the deductions are coming out and are correct. If they do not start within 6 weeks of our case being filed, notify our office immediately.

If your payroll deduction doesn't seem to be the correct amount or the amount suddenly changes without explanation, talk to your payroll department and find out why. Then contact us with a phone number and contact person in payroll so we can get it straightened out. You are responsible for your full payment each month so you may need to send the difference to the Trustee each pay period until your payroll department gets the deductions right.
If your payroll deduction stops, talk to your payroll department and find out why. Then contact us with a phone number and contact person in payroll so we can get it straightened out. Remember that you are responsible for your payments to the Trustee. If it is not deducted from your pay, you must send it to the Trustee directly until the deductions resume. If you do not, you will be in default and the Trustee will move to dismiss your case.
Keep in mind that this is a federal court order that your employer must comply with. It is different than a garnishment order which is limited to 15% of a person's gross income and can call for a deduction that exceeds that amount. This creates confusion for some payroll departments. If they say something like this you, give them our phone number and have them call us so we can explain it to them.

How many months do I have left in my plan?/ Where is my periodic statement?

The Trustee assigned to your case is the keeper of all monies in the case. The Trustee's office receives and disburses all funds that you pay in. The Trustee will send you a periodic report approximately every 6 months showing you who filed a claim and how much they have been paid. However many months your plan is confirmed for is how long your plan will run unless you manage to pay 100% to all creditors sooner. You can gage the possibility of that by reviewing your periodic report. If you do not receive your periodic report every 6 months, you may call your Trustee and request a copy. You can also call the Trustee to get an estimate of how much longer your plan will run.

Trustee Vaughn- 312-294-5900

Trustee Marshall- 312-431-1300 (also has a website for viewing plan information http://www.chapter13datacenter.com/)

Trustee Stearns- 630-577-1313

Will I receive my tax refund?/ I owe the IRS, what should I do?

You always have to file your federal and state returns on time each year. If you do not, your Chapter 13 case can be dismissed. If you do not owe the IRS money and the Trustee has not required that you turn over your tax refunds to their office, you will receive your refund as usual.
If you owe the IRS money, even though it is being paid through the plan, they will most likely keep your refund and reduce their claim in your bankruptcy by the refund amount. If you have been in your plan long enough that the IRS has been paid in full, you should receive your refund.
If you do not owe the IRS but the Trustee required you to turnover your refunds as a condition of your case being confirmed, you must file your taxes and when you receive your refund, you must send a money order or cashier's check to the Trustee for the amount of your refund. You must also forward a copy of the payment to the Trustee and a copy of your tax return to our office.
If you owe the IRS after your case has been filed, the taxes can be added to your plan if there is room in the plan for it. You need to provide our office with a copy of your tax return and a letter requesting the taxes be added to your plan. If you owe taxes as a result of underwithholding, you need to talk to your payroll department and change your exemptions so you do not end up owing every year that you are in the Chapter 13 because you will not be able to add the taxes to the plan every year.
If your plan will not allow for the tax debt to be added because it would increase your payment beyond what you can afford to do so, you do not have to pay the IRS until your plan is complete but they can charge your penalties and interest in the interim.

Can I take a loan from my 401k?

You can take a loan from your 401k (as long as your 401k provider will allow it) without court permission since you are essentially taking a loan from yourself. Keep in mind that you must begin repaying the 401k within so many days of issuance or you will face significant tax consequences. Be sure before you take the loan that repayment will not interfere with your ability to pay your plan payment and other existing obligations.

I or my spouse will be off work due to illness, injury, etc./ I or my spouse lost job

If you know that you or your spouse will be off work for a set period of time, it may be possible to temporarily reduce or suspend your plan payments. Please provide our office with the following:

A letter explaining the situation leading to the temporary loss of employment,
The last day of work and the expected return date,
Proof of any other household income.
If a motion is possible, we will file a motion to modify your plan. It will take approximately 30 days for the order to be entered from the date we receive the necessary information. If you have secured debt like the current mortgage payment or a car loan being paid through the plan, the payment cannot be stopped altogether but it may be reduced if the plan allows for it.

If you or your spouse becomes unemployed:

Notify us as soon as the unemployment occurs.
Find out if you will be eligible for unemployment and, if so, how much will you receive.
Send us proof of any other household income and an updated expense list. We will review your plan to see what your options are.

I received a notice from my mortgage company that I am in default under a previously entered repay/default order

Time is of the essence. You usually will have 14 days from the date the notice was issued to become current or prove that you are not behind.
If you are behind the amount that they claim, you must send certified funds in the appropriate amount as indicated in the notice so that they arrive before the expiration of the 14 days. If you do not, the stay will be lifted without a court hearing and the lender can proceed with foreclosure unless you work something out with the mortgage company directly.
If you do not believe you are in default, you must gather proof of all payments made to the mortgage company since the repay/default order was entered and fax them to our office as soon as possible. Proof of payments MUST be in the form of money order or cashier's check receipts or cancelled checks. Bank statements and copies of checks are not acceptable.

I have a new address/phone number

Call our office with the new information as soon as the change happens so we can update our records and notify the court. Otherwise, you may miss important notifications about your case.

I have a new job

Notify our office as soon as you know you will be switching employers. You are responsible for your plan payment no matter what. If you are on payroll control, you will have to send payments directly to the Trustee until payroll control can be established with your new employer.
Send us your first two pay stubs from your new employer so we can update and/or modify your plan if appropriate and establish new payroll control.

I want to dismiss my case/I want to convert to Chapter 7

Dismissal:

Notify our office that you wish to have your case dismissed.
We will send you an authorization to sign.
When we receive the signed authorization we will file a Motion to Dismiss. It will take 10-14 days from receipt of the disclaimer to have the case dismissed.

Conversion:

If you had no prior Chapter 7 filings in the 8 years before you filed Chapter 13 and your expenses exceed your income, you may qualify for conversion.
Notify our office that you are interested in conversion and fax us proof of all household income and an undated expense form.
We will review your case to see if conversion is possible. If so, we will send you a disclaimer to sign which you must return along with the fee for conversion (determined on a case by case basis).
We will file the notice of conversion and you will need to attend a new Meeting of Creditors on a date scheduled by the court.
Any cars or pre-filing mortgage arrears being paid through your Chapter 13 plan must be dealt with by you directly with the finance companies if you wish to keep the real estate or vehicles.

My utilities have been shut off post-filing

You must be current with any amounts that have come due after your bankruptcy was filed. (You do not have to pay pre-filing amounts to keep service or have it restored as those amounts are being paid through your plan).
If you are current with post-filing amounts due or once you become current, contact our office immediately. We will contact the utility company to make sure they are aware of your bankruptcy filing.
You will then need to contact the utility company again to arrange to have service restored.
You may have to pay a deposit but it cannot be more than 2.5-3 times the amount of an average bill.

What if some of my creditors don't file claims?

In order for unsecured creditors to get paid through the plan, they must file a claim by a certain deadline (90 days from the date of your Meeting of Creditors).
If a creditor fails to file a claim or files a claim after the deadline has passed, they will not be paid and, upon successful completion of your plan, the debts of creditors who did not file claims will be discharged, assuming you are entitled to a discharge. The money that would have gone to pay those claims will go to the creditors who filed their claims.
Your plan payment will not be lower because claims are not filed but, occasionally, unfiled claims will mean that your case will end early. This will happen when so many claims go unfiled that the creditors who did file claims are paid in full before the anticipated end of the confirmed plan.

My car was booted/My license was suspended for parking tickets

Pre-filing-

Once your case is filed, you can take your Notice of Automatic Stay and a copy of your bankruptcy petition (must pick one up at one of our offices) to the Secretary of State/Department of Revenue (for tickets) and have your license reinstated (after providing proof of insurance as needed, paying any outstanding moving violations and paying the license reinstatement fee) and the boot removed from your vehicle.
If you encounter any difficulties, get a phone number that we can call and notify us so we can call the appropriate person on your behalf.

Post-filing

If your license is suspended or your car booted for a pre-filing offense that is included in your bankruptcy, notify us immediately and we will assist you.

If your license is suspended or your car booted for post-filing offenses, you must pay the appropriate fines in order to have your license reinstated or boot removed from your vehicle.

Chicago Chapter 13 Bankruptcy Attorneys

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