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Court rules incarcerated man’s income too low for Chapter 13

Incarcerated people in Florida who are in debt might be interested in learning that a felon in jail in Illinois was not permitted to file for chapter 13 bankruptcy because his income was insufficient to work out a payment plan. However, the man still had the option of filing for a chapter 7 bankruptcy. Chapter 13 permits individuals to keep some of their assets and work out a payment plan over a period of three to five years.

An Illinois court ruled that an individual must be able to make the payments out of their own income and not that of another person. In this case, the man makes $14 per month in prison, and his parents had pledged an additional $25 per month.

The man was convicted of aggravated DUI in 2014 after he drove intoxicated and crashed his vehicle, resulting in the deaths of two passengers. There was no indication that the families of the victims intended to file wrongful death suits. However, the man was named in a wrongful death suit connected to an alleged drug sale in another case. He filed for chapter 13 bankruptcy before a default judgment was made against him.

While an incarcerated individual with little or no income may not qualify for chapter 13 bankruptcy, someone who does make a decent income may be a candidate. People accumulate debt for many different reasons such as job loss or illness, and a chapter 13 bankruptcy may give them the opportunity to get back on their feet again financially. The effect a bankruptcy has on a person’s credit rating may be less damaging than unresolved debt and can lessen over time as he or she rebuilds his or her credit.

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