If you are in the midst of a severe financial crisis, you may not know where to turn or what steps to take. Please don’t make the mistake of considering bankruptcy as your only course of action.

While Chapter 13 bankruptcy could be an option, it certainly does not mean it is the best or only option. Even a Chicago chapter 13 lawyer will encourage you to evaluate all avenues before taking the step of engaging federal bankruptcy courts.

Our in-house counsel and legal research team at Vantage Group Legal Services can help determine your best legal options and connect you with an attorney who can help.

Let’s take a look at what Chapter 13 bankruptcy is and the benefits and challenges it provides. Then we will explain why, for homeowners facing extreme financial demands, working with a foreclosure attorney is almost always a better route than working with a Chapter 13 lawyer. 

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a federal court order that allows those with enough income to repay all or part of their debts on a payment plan, rather than the court selling their assets to collect the amounts due. The court creates the repayment plan, and you must adhere to it.

What Are the Perceived Benefits of Chapter 13 Bankruptcy?

A Chicago bankruptcy attorney may explain Chapter 13 bankruptcy to you in favorable terms. They will tell you that it is a good option because:

  • The court won’t liquidate your assets; and
  • You will be able to pay your debts in a time frame that is more lenient than your current creditors’ timelines.

While there may be some truth to these possible outcomes, it is not the full story. Read on to understand the many negatives you will experience if you file for and are granted a Chapter 13 bankruptcy.

What Are the Risks and Challenges of Filing for Chapter 13 Bankruptcy?

First things first: There is no guarantee that the court will grant your bankruptcy request. Bankruptcy is a federal court action where you make a plea and a court official determines whether to grant it. There are many other risks to filing as well.

Filing Is Timely and Complex

To file, you will need to gather information that must be current. This includes a list of:

  • All your creditors, with account numbers and the amounts you owe;
  • The amount and sources of all of your income;
  • The property you own; 
  • Every contract and lease in your name; and
  • All your monthly living expenses.

You will also need to provide tax information, including a copy of your most recent federal tax return and a statement of any unpaid taxes.

Filing is Not Free

Chapter 13 is indeed intended to arrange for you to pay off debts. But to make that request, you must pay. To file for a Chapter 13 bankruptcy, you must pay hundreds of dollars in filing and administrative fees. 

If the Court Grants Chapter 13, Won’t Things Be Easier for Me?

Don’t be fooled into thinking that once you file for bankruptcy, your Chapter 13 attorney

take care of everything else. A large part of the bankruptcy court process is to give you an active role in working toward paying your debts and learning about financial management. The court may require that you:

  • Attend debtor education classes,
  • Work with a credit counselor, and
  • Make clearly defined payments and pay off your debt.

Along with these action steps, be aware that there are additional demands you will face. Financial obligations, adverse credit, and the potential loss of your home will linger.

Years of Obligations Ahead

When the court provides you with a payment plan, your obligation to repay can last for years. Failure to make agreed-upon payments will bring the matter back to court for further review, which could include the court ordering the sale of your belongings to pay debts.

Lingering Negative Credit

Chapter 13 bankruptcy remains on your credit report for seven years. You will likely find it a struggle to get additional credit during that full time frame. You also may be denied employment when potential employers run a credit check.

You Are Not Out of the Woods

If you do not make your payments, the court may sell your home. So, while you started the process to protect yourself, you may, in the end, lose your home and destroy your credit. Also, child support and alimony payments aren’t dischargeable, nor are student loans and unpaid taxes. The court will almost never lower or dismiss these obligations.

If Chapter 13 Is Not Best, What Else Can I Do?

The debt of your home should never be the catalyst for considering bankruptcy. Ultimately, if you want to get out from under the debt of your home, working with a Chicago Chapter 13 lawyer is not the best choice. Instead, it would be best if you work with a foreclosure attorney and consider these options.


Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. You will likely know if you are in foreclosure or at risk because the bank by now has notified you of its intent to foreclose or threatened to start proceedings.

Your foreclosure attorney can help you understand the steps ahead if you are facing foreclosure and be sure the process ends with you owing nothing to the bank. They will also make sure you come out from under your obligations regarding your homeowners association (HOA), insurance, and property taxes. With a foreclosure, you free yourself from a significant financial responsibility. This can be very beneficial to you.

Deed in Lieu of Foreclosure

If you are current with your mortgage payments but struggling with other bills and prefer not to keep your home, consider a deed in lieu of foreclosure. Your lawyer will arrange for you to turn over your home to the bank voluntarily with this option. In return, the bank will release you from your mortgage. 

With a deed in lieu of foreclosure, you need not go through the time and expense of trying to sell your home while falling further behind on all your bills. Also, you need not wait until the bank files a foreclosure against you.

With foreclosure or deed in lieu of foreclosure, you will not face the numerous dangers of bankruptcy. You will also get your wish to move on from the responsibility of a mortgage and get on with your life while managing your remaining expenses. 

Loan Modification or Forbearance

Finally, suppose you want to try and keep your home and carry your other debt. In that case, a foreclosure attorney can also help you address your bank regarding a loan modification that would give you more manageable mortgage payments.

They may also be able to require the bank to temporarily suspend your mortgage payments under federal COVID-19 regulations or advise you on other loan forbearance options. 

Can Vantage Group Legal Services Represent Me?

Vantage Group Legal Services arranges for highly competent attorneys to represent people just like you every day. Our goal is to provide affordable legal services to people in need of help. Vantage Group Legal Services is a unique company in that we are a group legal services company, not a law firm.

This is how our process works: You submit your inquiry to Vantage Group Legal Services for a free, no-pressure consultation. An intake attorney will engage you with a no-obligation, free consultation to learn about your situation.

From there, you may elect to subscribe to Vantage Group’s subscription plan, and in exchange, we will assign you a skillful lawyer from Vantage Group’s attorney network.   

Your experienced network attorney handles all aspects of your case for the duration of the subscription. In addition, you will have the continued secondary support supplied by Vantage Group’s internal staff. 

Contact Vantage Group Legal Services Today

If you need legal help, please call us today at 773-938-4747. We offer a free, no-obligation consultation. You can also reach us via our website. We can provide the legal guidance you are seeking.