Paying off debt can often feel impossible, especially when you’re facing high-interest credit cards or an emergency expense sends you on a spiral of late fees and extra charges. When debt is overwhelming, chapter 13 bankruptcy may be the right option to help you overcome your financial challenges and move forward.
Chapter 13 bankruptcy, sometimes called a “wage earner’s bankruptcy,” reorganizes and restructures your debt by creating a payment plan to repay all or a portion of what you owe. Once you file, all foreclosure and debt collection attempts must cease. During this time, your debts are reviewed along with your income and monthly living expenses, and you must propose a feasible repayment plan based on applying your disposable income to debt repayment.
If your repayment plan is accepted, you will make payments to a trustee who then disperses the payments to the creditors over a time span of three to five years. At the end of this period, if you remain in good standing with the trustee, eligible debt will be discharged, regardless of how much is left to pay. It is important to be aware that failing to make the agreed-upon payments can lead to the case being dismissed and debtors to continue with collections or foreclosure processes.
All of your debt can be included in Chapter 13 repayment plans, including your mortgage and some student loans, to help you get caught up. However, only specific debt can be discharged at the end of the payment period. This includes:
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Many people file to save their homes from foreclosure and get caught up with their mortgage. Chapter 13 offers two options to save your home:
Circumstances may have changes where you can now can afford your mortgage payment but do not have the lump sum required to get current. Through Chapter 13 you may be able to begin paying your regular mortgage payment and spread out the reinstatement amount over three or five years.
The bankruptcy courts in the Southern District of Florida have implemented a program to assist home borrowers in permanently modifying their loans to an affordable payment.
Chapter 13 bankruptcy allows you to keep your property and participate in the plan of reorganization. Different than in Chapter 7, the Trustee will not seek to sell your property to pay your debts.
If yo are paying a high interest rate on your car payment, you may be able to reduce the interest to around 5.25%. Additionally, if you’ve had the car for more than 910 days, you may be able to reduce the loan amount to present value. In many instances, this can result in huge savings.
Yes, a chapter 13 voluntary dismissal filed via a Notice of Voluntary Dismissal can be filed if you wish to dismiss your case. Any action paused by the bankruptcy will continue once the case is dismissed.
If you’re considering Bankruptcy, you need to speak with a Chapter 13 attorney at Stiberman Law. We represent clients across South Florida, including in Miami, Hollywood, Fort Lauderdale, West Palm Beach, and Boca Raton, advocating on their behalf and helping them get out from under debt, and we can help you too. Schedule a free consultation with a wage garnishment lawyer today by calling (954) 932-7804 or filling out the form below to get started. The consultation is completely free.FREE CONSULTATION
Filing for Chapter 13 bankruptcy is often the best opportunity to keep your home. If you are behind on mortgage payments and the foreclosure process has started, filing for Chapter 13 freezes the foreclosure process. Your delinquent mortgage payments are included in the debt repayment plan and you can also reschedule your mortgage into the payment plan too, which may lower your payment and give you a bit more freedom and flexibility to pay.
When the repayment period has ended, you will continue paying on your mortgage back in good standing with the lender.
While a Chapter 13 lawyer can provide you with personalized guidance as to whether this is the right option for you, this option is ideal for people who:
Have a consistent income above the state median for your family size;
Can make repayments, but are struggling with the size of the debt you are facing;
Have less than $2,750,000 in debt
You have assets you don’t want to lose, such as a car with equity, second home, or other non-exempt asset.
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The attorney will evaluate your debts, assets, financial history, and recommend the appropriate bankruptcy chapter to file. Your lawyer will explain chapter 13 allowable expense limits and how they will affect your chapter 13 plan payment.
There are approximately 23 official forms that you must submit with your bankruptcy filings. Your attorney will gather all the required information, prepare and complete all forms, claim the appropriate exemptions to protect your property, and review everything in detail with you prior to filing.
Your Chapter case will require your attorney to attend multiple confirmation court hearings to confirm your chapter 13 plan. Depending on your case, your lawyer will represent you in additional hearings on matters set by your creditors, the bankruptcy trustee, or sometimes the bankruptcy judge.
Once your chapter 13 case is filed your attorney will work with to ensure you comply with all court and trustee requirements and timely respond to all inquiries.
Understanding the rules and having an experienced Florida bankruptcy attorney by your side will help you avoid many possible pitfalls, including the dismissal of your case.
You must have regular income to to be able to fund your chapter 13 plan. Regular income may be in the form of W2 wages, self employment income, social security or disability benefits, and even 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.
Our Florida bankruptcy lawyer can file your case in less than 24 hours.
Different than in chapter 7, the bankruptcy Trustee will not seek to liquidate your property.
Chapter 13 does not have any income limitations to file and you do not have to pass a means test. Chapter 13 bankruptcy florida income limits are a common misconception.
Questions about debt limit chapter 13? Different than in Chapter 7, as of 2022 your debts in Chapter 13 may not exceed $2,750,000 at the time of filing.
Chapter 13 debtors must have regular income – Chapter 7 debtors do not.
The bankruptcy court will review your income and your basic living expenses. They will use this information to determine your disposable income. Your bankruptcy attorney will play a crucial role in helping to gather this information and then presenting it to the bankruptcy court.
All of your debts (both secured and unsecured) will need to be accounted for. Your assets will also need to be accounted for. In Florida bankruptcies, some of your property is exempt from liquidation during a bankruptcy proceeding.
Chapter 13 bankruptcies do not necessarily involve the liquidation of property. The focus is restructuring your debts so that you can pay them down and eliminate them within five years. This income-driven repayment plan may be preferable to other types of bankruptcies that require you to surrender personal property.
If your disposable income is not enough to satisfy all of your debts within five years, the remaining debt can be written off.
No, if you are behind on your mortgage, Chapter 13 bankruptcy restructures your late payment into your repayment plan to help you catch up. It’s important to make regular plan payments to ensure you remain in good standing.
Chapter 13 stays on your credit for seven years, but over time, with good financial decisions, your score will improve even if it’s still on there.
Federal student loans are not, but they can be included in your payment plan to help you catch up.
A Florida Chapter 13 Bankruptcy attorney can provide specific advice and tell you how to proceed in your particular situation.
Filing Chapter 13 costs a minimum of $310 for the case filing fee and administrative fee. These can be paid to the court in installments if necessary. To work with an attorney, the average cost to file the bankruptcy petition is between $900 to $1500 depending on the complexity of the case. The balance of attorney’s fees are typically included as part of your court repayment plan. In some instances, we offer $0 down options and affordable payment plans to help you get the legal assistance you need.
There is really no limit on how often you can file chapter 13 in Florida. Although you may be allowed to file multiple times, if you wish to receive a discharge of your debts, which is one of the main reasons individuals file for bankruptcy, you will have to wait two years from the time you filed a previous chapter 13 in which you received a discharge to obtain a discharge in your new case. Please visit our blog on how often you can file for bankruptcy for more information.
If you need to stave off the foreclosure through Chapter 13 Bankruptcys, our attorneys can help you.
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There are many complex pieces to filing for bankruptcy. You need an expert to look at the specifics of your financial situation. Contact a Chapter 13 bankruptcy attorney today to start getting answers. The consultation is free. We’ll provide answers, not judgement. We’ve helped individuals just like you create a better financial future.
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