When Do You Need a Chapter 13 Bankruptcy Lawyer in Florida?
Sometimes, your best efforts at building financial security go sideways, and no matter how hard you try, getting your debt under control seems impossible. When you’re in this situation, you need honest and experienced advice on how to move forward.
Debt is a vicious circle. When you can’t pay your bills on time, interest piles on until you think you’ll never touch the balance. Your credit rating suffers, making it harder to get credit cards and car loans when your finances improve.
If this sounds all too familiar, it’s time to consider filing for Chapter 13 bankruptcy protection. Loan Lawyers can help. Call our Florida bankruptcy lawyers today or contact us online for a free consultation to learn about your options.
What Is Chapter 13 Bankruptcy?
Bankruptcy is a legal remedy that offers financial relief to overextended individuals who can’t pay their bills. There are two kinds of personal bankruptcy: Chapter 7 and Chapter 13. A Chapter 7 bankruptcy wipes out all of your debt but might not stop a foreclosure, and you may be unable to keep personal property like your car.
Chapter 13 bankruptcy is a legal process that allows you to reorganize your finances. Your debt remains, but you and your creditors agree to a payment plan you can afford. The court appoints a trustee to oversee your case, and you make payments to the trustee during that repayment period, usually three to five years. The trustee pays your creditors on your behalf.
A Chapter 13 bankruptcy allows you to keep your belongings – you must surrender most personal property of value if you file for Chapter 7. One main qualifier for Chapter 13 is that you have sufficient income to make the plan-approved payments. You also can’t owe more than $400,000 in unsecured debt (cars, personal loans, credit cards) and $1 million for secured debts (mortgages).
Benefits of Chapter 13 Bankruptcy
In addition to reducing the amount of money you’ll be spending each month on debt repayment and potentially having part of your outstanding debt discharged at the end of your repayment plan, additional benefits of Chapter 13 include:
Government Debt Relief
If you owe past-due income taxes, those payments can be rolled into your payment plan. The same thing is true if you owe back domestic support — you pay over the approved period. If you have student loans, those are covered in Chapter 13. Any co-signed loans are protected, so your co-signers aren’t financially damaged.
Property Protection
Under Chapter 7, you must liquidate most of your personal property to satisfy your debt. Chapter 13 allows you to keep your personal property. One of the best benefits of a Chapter 13 filing is that if your home is in foreclosure, the bankruptcy immediately stops the proceedings and allows you to cure the default amount.
Chapter 7 Alternative
If your income is too high to qualify for Chapter 7, Chapter 13 could be an option. Because you couldn’t pass the “means” test, you should have enough disposable income to pay a reasonable amount to your creditors in a payment plan.
Who Is Eligible to File Chapter 13 Bankruptcy in Florida?
You must meet specific requirements to be eligible for a Chapter 13 reorganization. These are the criteria.
- Regular income, either wages or your business income
- The filing is personal, not for a partnership, company, or organization
- Unsecured debts don’t exceed $462, 275
- Secured debts are less than $1,395,875
- You have completed credit counseling from an approved counseling agency
- You have not filed for Chapter 13 in the past two years or Chapter 7 in the past four years
You are also required not to have had any prior Chapter 13 dismissals in the past six months because you failed to appear before the court or comply with court orders.
