Chapter 13 Bankruptcy

1. Florida Chapter 13 - What is Chapter 13?
2. Florida Chapter 13 - Who is eligible for Chapter 13?
3. Florida Chapter 13 - What are the advantages of a Chapter 13?
4. Florida Chapter 13 - Who should file Chapter 13?
5. Florida Chapter 13 - What steps are required to filing Chapter 13?
6. Florida Chapter 13 - How long does the repayment plan last?
7. Florida Chapter 13 - Can I convert a Chapter 13 to a Chapter 7?

What is Chapter 13?
Chapter 13 bankruptcy allows a debtor, with regular income, to repay all or part of their debt.  Under a Chapter 13 plan the debtor proposes a repayment plan and pays monthly installments for a period of three to five years. 

Who is eligible for Chapter 13?
An individual is eligible to file for Chapter 13 if their unsecured debts are less than $336,900 and secured debts are less than $1,010,650.  Chapter 13 debtors must also have regular income to use to pay back their creditors.  A debtor cannot file for Chapter 13 if during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.

What are the advantages of a Chapter 13?
The greatest advantage of a Chapter 13 filing is that the debtor can save their home from foreclosure by allowing the debtor to catch up on their delinquent mortgage payments over the length of the plan. 

Chapter 13 allows the debtor to keep all of their asset including assets that would be considered non-exempt assets in a Chapter 7 filing.

Chapter 13 allows the debtor to reduce secured debts and in some cases remove the second or third mortgage on a home. 

Example car – If your car is worth less than what you owe on it, the court may reduce the loan on the car to it’s current value.  I.E. you owe $20,000 on a car worth $10,000, you can have the car loan reduced to $10,000. 

Example home –  If you have a home worth $300,000 with a first mortgage for $350,000 and a second mortgage for $100,000, you can have the court remove the second mortgage. 

Who should file a Chapter 13?
Chapter 13 is best suited for people with regular income who don’t qualify for a Chapter 7, have assets that are not exempt, or people who are behind on their mortgage and want to keep their homes. 

What steps are required to file Chapter 13?

• Fill our the pre-consultation questionnaire
• Meet with Shmucher Law, PL representative to see if Chapter 13 is right for you
• Determine means to deal with secured creditors
• Devise a Chapter 13 payment plan
• File bankruptcy petition and necessary forms
• Attend necessary hearings
• Begin to make payments

How long does the repayment plan last?
Typically a repayment plan lasts between three to five years. 

Can I convert a Chapter 13 to a Chapter 7?
If during the duration of the plan you can no longer make the payments (due to a loss of job or other reason) you can convert your plan to a Chapter 7. 

Shmucher Law, PL, a bankruptcy law firm, represents debtors, creditors, and trustees in bankruptcy matters throughout Broward and Miami-Dade counties.