Chapter 13 Bankruptcy in Florida | Chapter 13 Bankruptcy Attorney

Chapter 13 Lawyer: Everything You Need to Know

Written by: Attorney Robert Stiberman.
Last Updated March 27, 2023

You may have heard of Chapter 13 bankruptcy if you’re considering bankruptcy. It’s a type of bankruptcy that allows individuals with regular income to develop a plan to repay all or part of their debts over a period of time. However, navigating the Chapter 13 bankruptcy process can be difficult, so hiring a Chapter 13 lawyer can be beneficial. In this article, we’ll discuss everything you need to know about Chapter 13 bankruptcy and how a Chapter 13 lawyer can help.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also known as a “wage earner’s plan,” is a type of bankruptcy that allows individuals with regular income to develop a plan to repay all or part of their debts over a period of time. 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.

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. However, only some are eligible for Chapter 13 bankruptcy. To be eligible, you must have a regular income, owe less than $2,700,000, and have completed credit counseling within 180 days of filing.

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. 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 the best possible 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 you with 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 will be familiar with the bankruptcy process and can help you navigate it 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 will allow 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 solely 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.

What to Expect During the Chapter 13 Bankruptcy Process

The Chapter 13 bankruptcy process can take several months to complete. Here’s what you can expect:

1. Filing a Petition: The first step in the Chapter 13 bankruptcy process is filing a petition and schedules with the bankruptcy court. These include information about your income, assets, debts, and expenses.
2. File a Chapter 13 Plan: Filing a Chapter 13 Plan involves detailing the amounts you must pay the Chapter 13 trustee each month and instructions on how the trustee should distribute those funds to your creditors. Your plan will typically last between three and five years.
3. 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.
4. Confirmation Hearing: Once your creditors have had a chance to review your repayment plan, a confirmation hearing will be held. During this hearing, the court will review your plan and determine whether it meets the requirements of Chapter 13 bankruptcy.
5. Completion of Plan: Once you’ve made all your payments according to your plan, your remaining debts will be discharged, and your bankruptcy case will be closed.

Who is Eligible to File Chapter 13 Bankruptcy?

Chapter 13 bankruptcy can be a helpful tool for individuals struggling with overwhelming debt and needing a structured repayment plan. However, not everyone is eligible to file for Chapter 13 bankruptcy. 11 U.S.C Code Chapter 13 outlines the eligibility requirements for individuals to file for bankruptcy under this chapter. Here are some eligibility requirements:

1. Regular income: To file for Chapter 13 bankruptcy, you must have a regular income sufficient to cover your living expenses and make monthly payments towards your repayment plan. This can include income from a job, self-employment, or other sources.
2. Debt limits: There are limits on the amount of debt you can have to be eligible for Chapter 13 bankruptcy. As of 2023, the limit is $2,750,000. You may need to consider chapter 11 bankruptcy protection if your debt exceeds these limits.
3. 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 must wait at least two years after filing for Chapter 13 bankruptcy and four years after filing for Chapter 7 bankruptcy before filing again.
4. Completion of credit counseling: Before filing for bankruptcy, you must complete credit counseling with an approved credit counseling agency. This counseling is designed to help you understand your options for managing your debt and develop a budget and financial plan.
5. Tax returns: The individual must have filed all federal income tax returns for the previous four years before filing for bankruptcy.
6. Good faith filing: You must file for Chapter 13 bankruptcy in good faith, not trying to abuse the bankruptcy system or defraud your creditors.

If you meet these eligibility requirements, Chapter 13 bankruptcy can provide a way to manage your debts and get back on track financially. By working with a qualified Chapter 13 lawyer, you can develop a repayment plan that meets your needs and helps you achieve your financial goals.

Debts That Can Be Discharged in Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows individuals to reorganize their debts and develop a repayment plan that will 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.

It’s important to note that not all debts can be discharged in Chapter 13 bankruptcy. For example, secured debts, such as mortgages and car loans, are not typically eligible for discharge. Additionally, student loan debt is generally only dischargeable in bankruptcy if you demonstrate undue hardship.

Advantages of Chapter 13 Bankruptcy

Chapter 13 bankruptcy can help you manage your debts and regain control of your financial situation. Here are some advantages of Chapter 13 bankruptcy:

1. Keep your property: Unlike Chapter 7 bankruptcy, which may require you to liquidate your assets to pay off your debts, Chapter 13 bankruptcy allows you to keep your property while you repay your debts. This can be especially beneficial if you own a home or have other valuable assets.
2. Stop foreclosure proceedings: If you’re facing foreclosure on your home, filing for Chapter 13 bankruptcy can stop the foreclosure proceedings and allow you to catch up on your missed payments through your repayment plan.
3. Repay your debts over time: Chapter 13 bankruptcy allows you to repay your debts over three to five years, giving you the time and space you need to get back on your feet. This can be especially helpful if you have significant debt and need a structured repayment plan.
4. Stop collection calls and creditor harassment: 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.
5. Protect co-signers: If you have a co-signer on your debts, such as a family member or friend, Chapter 13 bankruptcy can protect them from collection efforts by your creditors.
6. Improve your credit score: While bankruptcy can hurt your credit score in the short term, it can also provide a fresh start and the opportunity to rebuild your credit over time.
7. Participation in Mortgage Mediation Modification Program in Florida: 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.
8. Reduction of car payments: If an individual’s car is worth less than the outstanding balance on their car loan and they have owned the car for more than 910 days, they may be able to “cram down” the loan in Chapter 13 bankruptcy. This means that the individual would only have to pay the current market value of the car, not the total outstanding balance. Furthermore, suppose an individual is paying a high-interest rate on their car payment. In that case, they can reduce the interest to around 5.25%, significantly lowering their monthly costs.

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. The trustee plays a crucial role in bankruptcy, working with you and your creditors to develop and administer your repayment plan. Here’s an overview of the role of a Chapter 13 trustee:

1. Review your bankruptcy petition: When you file for bankruptcy, the trustee will review your 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 will also conduct the meeting of creditors, which is a meeting between you, your creditors, and the trustee. During this meeting, the trustee will review your bankruptcy petition and ask you questions about your financial situation and repayment plan.
3. Administering your repayment plan: Once it is approved, the trustee will administer it by collecting your monthly payments and distributing them to your creditors. The trustee will also ensure 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 will monitor your financial situation to ensure that you comply with the terms of your repayment plan. If your financial situation changes, such as if you lose your job or experience a significant increase in income, the trustee may need to modify 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 will ensure that your creditors receive as much money as possible through your repayment plan.

Working with a qualified Chapter 13 lawyer can help you navigate bankruptcy and work effectively with your trustee. If you have questions about the role of a Chapter 13 trustee or need help developing a repayment plan, don’t hesitate to schedule a consultation with a lawyer to discuss your options.