When filing for Chapter 13 bankruptcy, you are agreeing to pay back secured and unsecured creditors a monthly amount. It is a court-supervised payment plan that is often based on your income and reasonable expenses. Your Chapter 13 Plan is the amount of monthly payments that will be paid to your creditors. Once you pay that amount, most or all your debts are then erased.
Only individuals are eligible to file for Chapter 13 bankruptcy. No businesses can file for a bankruptcy of this type. To be eligible for Chapter 13 in Florida, you need to have enough income each month to repay at least a portion of your debt through the agreed-upon payment plan. This amount is determined by your total income, your monthly expenses, the amount and type of debts you have, and what property you own. Filers for Chapter 13 usually are facing a foreclosure, a wage garnishment, or a lawsuit for debts owed. Chapter 13 cases may entail debts such as back payments on alimony and child support; or falling behind on house payments or car payments.
Chapter 13 bankruptcy has specific monetary eligibility debt limits. As of 2021, those debt limits are approximately $419,000 of unsecured debt and approximately $1,257,000 of secured debt. If you have debt above these limits you may not be eligible to file for Chapter 13 bankruptcy protection. When you come into the office, we will help you put together a list of all your debts, both secured and unsecured, as well as other information. Unsecured debts are debts such as personal loans, medical bills, and credit cards. Secured debts are those in which the creditor has a security interest in your property as a guarantee, and include mortgages and vehicle loans.
Chapter 13 bankruptcy lets you keep all your property, but you have to pay creditors on unsecured debt a total amount equal to the value of all your nonexempt assets. Chapter 13 allows you to modify or eliminate some secured debts, and is used to stop mortgage foreclosure by permitting you to catch up on past due payments. Also, Chapter 13 permits discharge of some unsecured debts not dischargeable in a Chapter 7.
Filing for Chapter 13 bankruptcy in Florida has many of the same elements as a Chapter 7 case: a petition is filed, along with financial statements, and a certificate of completion of a credit counseling class. You also will be expected to attend a meeting of creditors. We will work with you to create and submit a plan to the bankruptcy court for repaying your creditors, usually over a period of three to five years, with payments coming from your projected future income. If this plan is approved by the court, you will make payments to a trustee, who will allocate them to creditors. Most or all of your debts will be erased once your payment plan is completed. To set up your free consultation with our attorney please contact ZinnLaw at 239-418-1529 or visit us online at zinn.law.