Chapter 13 Bankruptcy in Florida | Chapter 13 Bankruptcy Attorney

Written by: Attorney Robert Stiberman.
Last Updated August 26, 2024

This article covers everything you need to know about Chapter 13 bankruptcy, including the latest updates on eligibility as of June 22, 2024.

Chapter 13 bankruptcy can be a lifeline for Floridians facing overwhelming debt. Imagine being able to keep your car, your home, and other important assets while creating a manageable payment plan to address your financial challenges. Chapter 13 bankruptcy is designed for individuals with regular income to create a repayment plan for all or part of their debts over time.

Moreover, Chapter 13 allows you to reorganize your debt rather than liquidate assets, which can be a game-changer for stabilizing your financial health. By working with a skilled attorney, you can understand which debts can be included and how to best approach repayment, ultimately achieving peace of mind and financial stability.

As a team experienced in Chapter 13 bankruptcy cases in Florida, we at Stiberman Law, P.A. are dedicated to guiding you through every step of this journey. Our knowledge ensures that you have the necessary support and knowledge to confidently pursue this viable debt relief option.

Contact us and schedule a free consultation today. Let us help you regain control of your financial life. 

What Is Chapter 13 Bankruptcy?

According to the US Courts, “Chapter 13 bankruptcy, also called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their debts.” Unlike Chapter 7 bankruptcy, which involves liquidating assets to pay off debts, Chapter 13 bankruptcy involves creating a payment plan that lasts three to five years. This repayment plan usually extends over three to five years, depending on the debtor’s income and circumstances. 

One key benefit of Chapter 13 is that it lets debtors keep their property while catching up on missed mortgage or car payments. It’s especially useful for those who face foreclosure or repossession. Chapter 13 bankruptcy can be a good option for individuals who want to keep their assets, such as a home or car, and have a steady income that can be used to pay off debts over time.

The bankruptcy courts review the repayment plan to ensure it’s feasible and fair to creditors. You should also know that Chapter 13 requires ongoing court supervision throughout the repayment period. This ensures that payments are made regularly and the plan is strictly followed.

How Can a Chapter 13 Lawyer Help?

Navigating the Chapter 13 bankruptcy process can be difficult, so hiring a Chapter 13 lawyer can be beneficial. Here are some ways a Chapter 13 lawyer can help:

1. They Can Help You Understand Your Options: A Chapter 13 lawyer can help you understand your options regarding bankruptcy. They can explain the differences between Chapter 7 and Chapter 13 bankruptcy and their benefits and drawbacks.
2. Develop a Repayment Plan: One of the most important aspects of Chapter 13 bankruptcy is developing a repayment plan. A Chapter 13 lawyer can help you create a realistic plan for your needs. They can also negotiate with creditors to get favorable repayment terms.
3. Represent You in Court: Filing for bankruptcy involves going to court, and a Chapter 13 lawyer can represent you. They can help you prepare for court appearances and argue on your behalf during hearings.
4. Handle Paperwork: Filing for bankruptcy involves a lot of paperwork, and a Chapter 13 lawyer can handle the paperwork for you. They can ensure that all documents are filed correctly and on time, which can help prevent delays in the bankruptcy process.
5. Provide Legal Advice: A Chapter 13 lawyer can provide legal advice throughout the bankruptcy process. They can answer your questions and provide guidance.

​​How to Choose a Chapter 13 Lawyer

Choosing the right one is essential if you’ve decided to hire a Chapter 13 lawyer. Here are some tips for choosing a Chapter 13 lawyer:

1. Look for Experience: When choosing a Chapter 13 lawyer, look for one with experience handling Chapter 13 bankruptcy cases. An experienced lawyer has experience working on bankruptcy cases and can help you navigate them more effectively.
2. Check Credentials: Make sure the lawyer you choose is licensed to practice law in your state. You can check a lawyer’s credentials by contacting your state’s bar association.
3. Read Reviews: Look for reviews of the lawyer online. This can give you an idea of what it’s like to work with them and whether they have a good track record.
4. Schedule a Consultation: Before hiring a Chapter 13 lawyer, schedule a consultation with them. This allows you to ask questions and better understand their experience and approach to handling Chapter 13 cases.
5. Consider Fees: It’s essential to consider the fees a Chapter 13 lawyer charges. While you don’t want to choose a lawyer based on cost, you don’t want to incur unexpected fees. Ensure you understand how the lawyer charges and what services are included in their fees.

Benefits of Filing for Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy allows us to reorganize our debts. As noted by the US Courts, “Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.” The US Courts also note that Chapter 13 can stop home foreclosure. 

When you file for Chapter 13, foreclosure proceedings halt, allowing you to catch up on past-due mortgage payments and keep your homes; you can find more information on Debt.org under Bankruptcy Exemptions. 

Another advantage is preventing wage garnishments. When you file under Chapter 13, your creditors cannot garnish our wages, providing us with financial relief and stability during the repayment period. Finally, according to US Courts, “this provision may protect co-signers.” If someone co-signed a loan for you, Chapter 13 can shield them from collections as long as you continue making payments under our repayment plan. Also, once you file for bankruptcy, creditors must stop collection calls and other forms of harassment. This can provide much-needed relief from the stress and anxiety of overwhelming debt.

Chapter 13 helps manage debts by consolidating them into a single monthly payment. 

Moreover, filing for Chapter 13 can significantly affect your credit report. First, it stays on your credit report for up to ten years. Additionally, it immediately causes a drop between 100 and 200 points in your credit score. While it impacts our credit score, there are steps we can take to rebuild credit after bankruptcy.

In Florida, individuals filing for Chapter 13 bankruptcy can participate in the Mortgage Mediation Modification Program (MMM), which can help them modify their mortgage and potentially reduce their monthly mortgage payments.

Eligibility for Chapter 13 Bankruptcy

Individuals are required to meet some criteria to qualify for Chapter 13 bankruptcy. 11 USC Code Chapter 13 outlines the eligibility requirements for individuals to file for bankruptcy under this chapter. 

Consistent Income: Applicants need a regular source of income. This is crucial because it shows that you can make the monthly payments as part of your repayment plan. This can include income from a job, self-employment, or other sources.

Previous Bankruptcies: If you’ve filed for bankruptcy in the past, there are restrictions on when you can file again. For Chapter 13 bankruptcy, you need to wait at least two years after filing for Chapter 13 bankruptcy and four years after filing for Chapter 7 bankruptcy before filing again.

Debt Limits: There are limits on how much debt you can have. Your secured debts (like mortgages and car loans) should be less than $1,395,875, and your unsecured debts (like credit cards and medical bills) should be less than $465,275, as noted by the US Bankruptcy Court. 

Tax Filings: Before we can file, the Internal Revenue Service (IRS) notes that you need to be current on our tax filings for the last four years. 

Credit Counseling: Individuals are required to complete credit counseling from an approved agency within 180 days of filing bankruptcy. This counseling is designed to help you understand your options for managing your debt and develop a budget and financial plan. 

Good Faith Filing: You are required to file for Chapter 13 bankruptcy in good faith, not trying to abuse the bankruptcy system or defraud your creditors.

Hiring a Chapter 13 bankruptcy attorney can help you navigate these requirements. They can review your financial situation and determine if you meet the criteria. Attorneys may also assist in preparing and filing all necessary documents, developing a feasible repayment plan, and representing you in court. 

The Chapter 13 Bankruptcy Process

Filing the Petition

The process starts by filing a detailed Chapter 13 petition with the court. The petition includes information about your income, assets, debts, and expenses. An attorney can help ensure everything is accurate and complete, preventing delays and complications.

Creating a Repayment Plan

Next, you need to work on creating a repayment plan. Filing a Chapter 13 Plan involves detailing the amounts you need to pay the Chapter 13 trustee each month and instructions on how the trustee should distribute those funds to your creditors. A repayment plan typically lasts between three and five years. Priority claims like taxes and child support, secured debts like mortgages, and unsecured debts like credit cards are all included. Your attorney negotiates and drafts the plan to protect our interests.

Meeting With Creditors 

After you file your petition, you’ll have to meet with your creditors. This “341 meeting” is typically held within a month of filing. The trustee and creditors can ask questions about your finances and repayment plan at the meeting.

Confirmation Hearing

At the confirmation hearing, the court reviews your repayment plan. During this hearing, the court reviews your plan and determines whether it meets the requirements of Chapter 13 bankruptcy. Creditors can object, but your attorney represents you and advocates for the plan’s approval. The judge may ask questions or require adjustments, which your attorney handles to ensure your plan gets confirmed.

Plan Implementation and Discharge

Once you’ve made all your payments according to your plan, your remaining debts are discharged, and your bankruptcy case is closed. Your attorney helps monitor progress and addresses any issues, such as missed payments. After completing the repayment plan, any remaining dischargeable debts are wiped out; non-dischargeable debts include

• Child support and alimony.
• Some types of student loans.
• Criminal fines.
• Long-term obligations like mortgages.
• Taxes, though some exceptions apply. See tax debt in bankruptcy. 

Debts That Can Be Discharged in Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows individuals to reorganize their debts and develop a repayment plan that can enable them to pay off their debts over three to five years. However, not all debts are treated equally in bankruptcy. Here are some debts that can be discharged in Chapter 13 bankruptcy:

1. Credit Card Debt: Credit card debt is one of the most common types of debt that can be discharged in Chapter 13 bankruptcy. This includes balances owed on store credit cards, gas cards, and other unsecured credit accounts.
2. Medical Bills: Medical bills can quickly add up and become overwhelming. Fortunately, medical debt is considered unsecured and can be discharged in Chapter 13 bankruptcy.
3. Personal Loans: If you’ve taken out a personal loan, such as a payday loan or cash advance, it may be discharged in Chapter 13 bankruptcy.
4. Past Due Utility Bills: If you owe money on past unpaid utility bills, such as electricity or water, they may be included in your Chapter 13 bankruptcy repayment plan.
5. Certain Tax Debts: Some tax liabilities can be discharged in Chapter 13 bankruptcy, but not all tax debts are eligible for discharge. It’s essential to consult with a qualified Chapter 13 lawyer to determine whether your tax debts can be discharged.
6. Debts Related to Divorce: If you have debts related to a divorce settlement, such as alimony or child support payments, they may be included in your Chapter 13 repayment plan.

The Role of a Chapter 13 Trustee in Bankruptcy

When you file for Chapter 13 bankruptcy, you’ll work closely with a Chapter 13 trustee who is appointed by the US Trustee. The trustee plays a crucial role in bankruptcy, working with you and your creditors to develop and administer your repayment plan, as noted by 28 USC § 586(b). 

1. Review Your Bankruptcy Petition: When you file for bankruptcy, the trustee reviews your bankruptcy petition and schedules to ensure they’re accurate and complete. The trustee may request additional information or clarification if there are any discrepancies or errors.
2. Conducting the Meeting of Creditors: The trustee conducts the meeting of creditors, which is a meeting between you, your creditors, and the trustee. During this meeting, the trustee reviews your bankruptcy petition and asks you questions about your financial situation and repayment plan.
3. Administering Your Repayment Plan: Once approved, the trustee administers it by collecting your monthly payments and distributing them to your creditors. The trustee also ensures that you’re making your payments on time and according to the terms of your plan.
4. Monitoring Your Financial Situation: Throughout the bankruptcy process, the trustee monitors your financial situation to ensure that you comply with the terms of your repayment plan. 
5. Representing The Interests of your Creditors: While the trustee is there to help you through the bankruptcy process, they also represent the interests of your creditors. This means the trustee ensures that your creditors receive as much money as possible through your repayment plan.

FAQs About Chapter 13 Bankruptcy

Who is Eligible for Chapter 13 Bankruptcy?

Chapter 13 is available to individuals with a stable income who can demonstrate the ability to make regular payments.

How Does the Repayment Plan Work?

Under Chapter 13, debtors propose a repayment plan to make installments to creditors. This plan usually lasts three to five years and covers secured and unsecured debts.

What Happens to My Property?

One significant benefit is that you may keep your property while you make payments under the plan. Creditors are required to stop attempting to collect debts as soon as you file for Chapter 13.

Which Debts Must Be Paid in Full?

Certain debts are required to be paid in full through your repayment plan. These typically include priority debts like taxes and child support.

Are Any Debts Dischargeable?

Unsecured debts such as credit card debt may be paid in part or sometimes even erased. However, some debts, like student loans, are not dischargeable.

What is the Cost to File for Chapter 13?

The filing fee for Chapter 13 bankruptcy is $313. 

How Long Does the Process Take?

The initial filing and plan proposal take time, followed by a confirmation hearing within 40 days. The entire process extends throughout the repayment plan.

Why Choose Stiberman Law, P.A. for Your Chapter 13 Bankruptcy Case?

At Stiberman Law, P.A., we have more than two decades of experience handling bankruptcy cases. Our team is highly knowledgeable about the legal processes and nuances required for successful filings. Additionally, we pride ourselves on providing personalized service. Each client gets tailored guidance based on their unique financial situation. We ensure that all legal paperwork is completed accurately and on time.

Moreover, client support is a key focus. We assist with every step of the process, from initial filing to final discharge. Our goal is to make the experience as stress-free as possible for you.

Feel free to contact us to take the first step towards financial stability. Schedule a consultation today; we are here to help you regain control of your financial future. zz