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.
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.
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:
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:
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.
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.
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
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:
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).
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.
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
Robert A. Stiberman. An attorney with over 12 years of experience in bankruptcy law.
If you’re considering bankruptcy in Florida, it’s essential to seek the guidance of an experienced attorney. At Stiberman Law, we have helped clients throughout the state, including Miami, Hollywood, Fort Lauderdale, West Palm Beach, and Boca Raton, navigate the Chapter 13 bankruptcy process and achieve financial freedom. Our dedicated attorneys will advocate and help you get out of debt.
To get started, you can schedule a free consultation with a Chapter 13 bankruptcy attorney by calling (954) 932-7804 or filling out the form below. During the appointment, we’ll review your financial situation, discuss your options, and answer any questions you may have. We’re here to help you every step of the way toward a brighter financial future, and we look forward to speaking with you soon.
FREE CONSULTATIONIf you’re facing foreclosure on your home, Chapter 13 bankruptcy may be able to help. When you file for Chapter 13 bankruptcy, an automatic stay goes into effect, halting all collection actions, including foreclosure proceedings.
During this time, you’ll work with a bankruptcy attorney to create a repayment plan to catch up on missed mortgage payments and other debts over three to five years. This can give you the breathing room to get your finances back on track while keeping your home.
However, it’s important to note that Chapter 13 bankruptcy will not eliminate all your debts, and you’ll need to continue making your mortgage payments in the future. If you’re struggling to keep up with your payments, your bankruptcy attorney may be able to negotiate a loan modification with your lender to make your payments more manageable.
Chapter 13 bankruptcy may be right for you if you:
If you’re considering filing for Chapter 13 bankruptcy, exploring your options and understanding this process’s potential benefits and drawbacks is essential. Working with an experienced bankruptcy lawyer can help you make informed decisions and navigate the complex legal system.
We offer a free consultation to see if Chapter 13 bankruptcy is right for you. Our team of dedicated attorneys has helped countless individuals and families throughout Florida find relief from debt and get a fresh start.
We’ll review your finances and discuss your options for getting back on track. We’ll answer any questions and help you make the best decision.
Be sure to get the help you need. Please get in touch with us today to schedule your free consultation with a Chapter 13 bankruptcy lawyer.
FREE CONSULTATIONWhile Chapter 13 bankruptcy can be a helpful tool for managing debt, some horror stories are also associated with this type of bankruptcy. Here are some examples of what can go wrong:
While Chapter 13 bankruptcy can be a helpful tool for managing debt, it’s essential to understand the risks and potential downsides. By working with a qualified Chapter 13 lawyer, you can make an informed decision about whether Chapter 13 bankruptcy is the right choice for you and avoid the horror stories associated with this type of bankruptcy.
If you’re considering filing for Chapter 13 bankruptcy, you may have questions about the process. Here are some common questions and answers about Chapter 13 bankruptcy:
A: You must have the income to fund your chapter 13 plan. Regular income may include W2 wages, self-employment income, social security or disability benefits, and family support.
Effective June 21, 2022, individuals with debts less than $2,750,000 may file for Chapter 13. See Bankruptcy Threshold Adjustment and Technical Corrections Act.
A: It takes three to four months to confirm your chapter 13 plan from when you file your case. Chapter 13 bankruptcy typically lasts between three and five years. During this time, you’ll make monthly payments to the bankruptcy trustee and work to pay off your debts. Once you’ve completed your repayment plan and complied with all requirements, you will receive a discharge of eligible debts.
A: Yes, you can file a Notice of Voluntary Dismissal to dismiss your case, but any action paused by the bankruptcy will continue after dismissal.
A: One of the benefits of Chapter 13 bankruptcy is that you can keep your assets, such as your home and car, as long as you continue to make payments on them according to the terms of your repayment plan.
A: Chapter 13 stays on your credit for seven years, but with sound financial decisions, your score will improve, even if it’s still there.
A: Federal student loans are not, but they can be included in your payment plan to help you catch up.
A: While it is not required by law to have a lawyer when filing for Chapter 13 bankruptcy in Florida, it is highly recommended that you work with an experienced bankruptcy attorney. Chapter 13 bankruptcy is a complex legal process that involves creating a repayment plan and navigating the court system. A knowledgeable attorney can help ensure that your rights are protected, your plan is fair and feasible, and your case runs smoothly.
A: Filing Chapter 13 costs a minimum of $310 for case filing and administrative fees. These fees can be paid to the court in installments if necessary. The average cost to file a bankruptcy petition with an attorney is between $900 to $1500, depending on complexity. Your attorney may be able to include any balance of attorney’s fees in your court repayment plan. Sometimes, we offer $0 down options and affordable payment plans to help you get the legal assistance you need.
A: There is no limit on how often you can file chapter 13 in Florida. However, if you wish to receive a new discharge, one of the main reasons individuals file for bankruptcy, you will have to wait two years from when you filed a previous chapter 13 in which you received a discharge. For more information, please visit our blog on how often you can file for bankruptcy.
Explore the following topics to continue learning about chapter 13 bankruptcy:
Chapter 7 vs. Chapter 13 Bankruptcy
2023 Guide To File Chapter 13 Bankruptcy In Florida
How long does Chapter 13 take?
Pros And Cons Of Chapter 13 Bankruptcy
Ch 13 Bankruptcy And Reverse Mortgage Issues
How Long Does Bankruptcy Stay On Your Credit Report?
Chapter 13 Bankruptcy and Your Credit Report: Understanding the Process and Rebuilding Your Credit
Consequences of Chapter 13 Bankruptcy Dismissal and Your Options
Understanding Chapter 13 Bankruptcy and Debtor Education Requirements
Filing Chapter 13 Bankruptcy: Jointly or Individually?
Can You File for Chapter 13 Bankruptcy When You’re Unemployed?
Understanding Chapter 13 Bankruptcy: Timeline, Eligibility, and Pros and Cons
Understanding Converting a Chapter 13 to a Chapter 7 Bankruptcy
Choosing a law firm to represent you is an important decision. Robert Stiberman is a licensed Florida attorney and has been a member in good standing of the Florida bar since 1998. He is admitted to practice in the United States District Court for the Southern, Middle, and Northern Districts of Florida. Having represented more than 1700 Florida bankruptcy clients, Robert is an experienced bankruptcy attorney with over 13 years of experience in consumer Chapter 7 and Chapter 13 cases. He regularly practices in the Miami, Fort Lauderdale, and West Palm Beach Divisions of the Bankruptcy Court.
He began his career as a volunteer attorney in the Miami Dade Public Defender’s Office, and in 2007 he founded Stiberman Law, P.A. Robert earned his Juris Doctorate Degree from the University of Miami School of Law in 1996. He is passionate about helping consumers obtain debt relief and actively handles all bankruptcy matters from filing to discharge.
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