What Are Common Questions about Chapter 13 Bankruptcy?
Bankruptcy is a complicated but important legal matter that can afford you the opportunity to crawl out from under crushing debt and move forward toward a fresh financial start. Chapter 13 bankruptcy refers to a supervised payment plan in which you don’t have to liquidate your assets but instead secure a manageable plan that allows you to secure firmer financial footing. If you are considering chapter 13 bankruptcy, it’s in your best financial interest to have an experienced Florida bankruptcy attorneyon your side.
If bankruptcy is on your mind, you have questions, and the answers to those others in your situation ask most frequently can help.
What’s the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 13 bankruptcy was once referred to as “the wage earner’s plan”, and it refers to a voluntary reorganization of debt. With the help of your dedicated bankruptcy attorney, you will propose an installment repayment plan that allows you to get a better handle on your debt load. Chapter 7 bankruptcy, on the other hand, focuses on liquidating assets in the process of off-loading or discharging unsecured debts, such as the following:
- Credit cards
- Medical bills
- Personal loans
How does chapter 13 bankruptcy work?
You and your bankruptcy attorney will propose a repayment plan –that extends over a period of from three to five years – to your creditors. The payment is not likely going to be the full amount owed to your creditors. Rather, it is determined by your income and allowed expenses. If your current annual income for a household of your size is below Florida’s median, you may qualify for a three-year repayment plan, which can be extended to five years of lower payments if you can demonstrate need. If you are above the state’s median for your household size, however, your only option is a five-year repayment plan.
What is a primary advantage of a chapter 13 bankruptcy?
Chapter 13 bankruptcy affords the possibility of saving your home from foreclosure. The chapter 13 process allows you to halt foreclosure proceedings and to work toward curing your delinquent mortgage payments over the course of your bankruptcy plan. In order to do so, however, you’ll need to keep up with your mortgage payments moving forward.
Who is eligible for filing chapter 13 bankruptcy?
Anyone, including those who are self-employed and those who operate unincorporated businesses, can qualify for Chapter 13 relief as long as their total secured and unsecured debts upon filing are less than $2,750,000.
What debts can’t be addressed in a chapter 13 bankruptcy?
There are certain debts that cannot be discharged in a chapter 13 bankruptcy, including:
- Home mortgages
- Alimony or child support arrearages
- Certain kinds of taxes
- Debt associated with most kinds of government-funded or guaranteed educational loans
Speak with an Experienced Florida Bankruptcy Attorney Today
Brian McMahon at Brian K. McMahon, P.A., is a formidable bankruptcy attorney with more than three decades of impressive experience helping clients like you obtain advantageous bankruptcy plans that support their brightest futures. For more information, please don’t wait to contact or call us at 561-658-1789 today.