Chapter 13 can stop creditor harassment for Illinois debtors

Whether they are considering bankruptcy, or know of a friend or loved one in bankruptcy proceedings, Illinois residents who face mounting debts should know that by filing for Chapter 13 bankruptcy, they can prevent creditors from making harassing phone calls or commencing collection. Chapter 13 allows debtors to create a court-approved reorganization plan, so that they can make manageable payments on their debts over time.

Recently, a former Illinois contractor filed for Chapter 13 while much of the contract work he had been hired to perform, including installation of patios outside of two homes, remained unfinished. According to bankruptcy documents, his debts are near $300,000 and he has few assets. By filing for Chapter 13 bankruptcy, the contractor seeks to obtain debt relief and discharge at least some of his debts.

The man’s customers received a bankruptcy notice after he filed. While they may be entitled to complain that he did not finish their patios, an automatic stay becomes effective to prohibit creditors from pursuing collection activities when a debtor files for Chapter 13. This bars creditors for any additional attempts to collect on a debt during the bankruptcy proceedings. During this time, creditors cannot attempt to seize a debtor’s property or garnish income, and they cannot disclose debt to any credit reporting agency.

Worth noting, however, is that pension loans, money owed for taxes and alimony and child support obligations are still subject to collection during a Chapter 13 bankruptcy. But, for Illinois residents who are in need of debt relief and face harassment from creditors, Chapter 13 can be a viable solution.

Source:, “Crafty contractor files bankruptcy, avoids debts,” Chris Nagus, Aug. 30, 2012

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Chapter 13 can stop creditor harassment for Illinois debtors