Learn how Chapter 13 bankruptcy works.
In a Nutshell, Chapter 13 Bankruptcy is a common legal process that allows you ...
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.
In other types of bankruptcies you are required to liquidate your non-exempt personal assets. To be eligible to file for Chapter 13 bankruptcy, you must prove that you have enough disposable income over the next five years to equal or exceed the amount you would pay back today if you were to liquidate your non-exempt assets.
Put more simply, the bankruptcy courts prefer that you file a Chapter 7 bankruptcy if liquidating your non-exempt assets would provide a higher total repayment to your unsecured creditors.
Chapter 13 bankruptcy in Florida requires you to put all of your family’s disposable income towards the debts that are included in the bankruptcy for up to five years. If the debts are satisfied before the five year mark, you regain control of your disposable income.
You may be eligible to file for Chapter 13 bankruptcy if you have less than $383,175 in unsecured debts, and less than $1,149,525 in secured debts. Unsecured debts are things like credit cards and personal loans. Secured debts may include mortgages, car loans and other types of loans where a piece of property was put up as collateral.
There are other important factors to consider when filing for Chapter 13 bankruptcy in Florida. If you think you need to file for bankruptcy, talk to an experienced Chapter 13 bankruptcy lawyer. Your unique circumstances require a personalized solution.
When you file for Chapter 13 bankruptcy, all collection activity stops. This is referred to in Florida as an “automatic stay”. If your home is in foreclosure, the process will come to a halt. Your phone should stop receiving calls from creditors. Your mailbox will no longer be a source of anxiety in your daily routine.
Once you’ve initiated a Chapter 13 bankruptcy, the automatic stay will remain in effect for five years, or until the debts are paid in full, whichever comes first. The only way that the stay can be lifted is if you fail to make your agreed payments.
A 341 notice will be mailed to the creditors you name in your Chapter 13 bankruptcy filing. This serves to notify them that you have entered the bankruptcy process and they should await the outcome of your filing.
Chapter 13 will help you wipe the slate clean by eliminating the following types of debts:
Chapter 13 bankruptcy does not allow for the discharge of non-dischargeable obligations such as:
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