Representing Florida Residents in Bankruptcy Matters
Chapter 13 bankruptcy may help lift the burden of overwhelming debt through reorganization. The bankruptcy lawyers at Anidjar & Levine can advise you as to how Chapter 13 can help you manage your debt, given your financial situation and goals. If you decide to proceed with bankruptcy, we can provide the guidance and support you need to emerge from the process with a satisfactory outcome.
Chapter 13 Bankruptcy in Florida
The two most common types of bankruptcies are Chapter 7 and Chapter 13. While Chapter 7 is often favored because of its relative speed, some individuals may not be eligible for Chapter 7 either because they failed the “means test” or because Chapter 7 may not be the best option for their particular situation. In these cases, Chapter 13 may be a viable alternative.
While Chapter 7 is a liquidating bankruptcy, where your non-exempt property is sold to pay off creditors, Chapter 13 is a reorganization bankruptcy. If you have enough disposable income to pay your creditors, you can have your debt reorganized under Chapter 13 to make it easier for you to pay those debts under a repayment plan.
Chapter 13 debt repayment plans are typically three to five years long, which means you will have to make monthly payments over the duration of your plan. Unlike Chapter 7, Chapter 13 will make it easier for you to pay your debt, but it will not eliminate your unsecured debt until you complete your plan. An experienced bankruptcy lawyer can help you develop a repayment plan that considers your unique situation, the relevant Florida exemptions, and other factors that can affect your ability to ultimately complete the repayment plan.
You may be eligible for Chapter 13 if you do not pass the “means test” for Chapter 7. However, there are limits on how much debt you can have to file for Chapter 13 protection. The limits are adjusted periodically.
Process for Filing Chapter 13 Bankruptcy
To start the Chapter 13 filing process, you must file a petition with the local bankruptcy court. The petition should include a copy of your debt repayment plan and schedules that list your current income, expenses, assets, and liabilities. The plan must identify:
- Priority clams, such as alimony, IRS claims, and bankruptcy costs
- Secured claims, such as your home, car, or other property that a creditor can take back as collateral if you do not pay the debt
- Unsecured claims, which are claims in which the creditor has no security interest, such as credit card debt
You can keep the property covered by secured claims if you make the payments under the repayment plan. This is particularly important if you wish to stop foreclosure on your home or repossession of your car.
The repayment plan will be reviewed by your trustee and any creditors at a meeting known as a 341 meeting, and it will be confirmed at a later hearing. Once the repayment plan is approved, the trustee in your case will collect payments and pay your creditors. After you have made your payments, the court will discharge any remaining dischargeable debt.
Advantages and Disadvantages of Chapter 13
Chapter 13 bankruptcy has several advantages, including:
- Retention of exempt and non-exempt property, so long as you make your payments
- Immediate protection from lawsuits, collections, and wage garnishment
- Foreclosure protection if you meet the terms of your plan
One of the main disadvantages to Chapter 13 is the longer process. This means:
- It will take longer for you to complete the bankruptcy process;
- You will have less disposable income over the course of the repayment; and
- You will be involved in the legal process for the duration of the plan.
A bankruptcy attorney can explain the benefits and disadvantages of Chapter 13 in your case.
Bankruptcy Lawyers Serving the Fort Lauderdale Area
At Anidjar & Levine, our Fort Lauderdale bankruptcy attorneys offer knowledgeable counseling in bankruptcy matters. We can discuss the circumstances of your particular case and explore whether bankruptcy can help you achieve your goals. We serve clients in West Palm Beach and Miami-Dade County. Call us today at 800-747-3733 or through our online form to schedule a no-obligation consultation.