Chapter 13 Bankruptcy is usually referred to as the plan for wage earners. By this plan in Florida, people get a chance and a structured path to repay their debts throughout almost 3 to 5 years. Unlike Chapter 7, Chapter 13 allows people to retain their belongings while emphasizing outstanding economic commitments. Here, we provide a deep knowledge of Chapter 13 bankruptcy, its benefits, eligibility, and filing procedure in Florida.

Understanding Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is developed for people with a constant source of income who want to repay all or some part of their debts over a period. It allows bankrupt people to propose a repayment plan to make installments to creditors for a specific decided timeline, like 3 to 5 years.

This kind of bankruptcy is specifically useful for people who have failed or gone short on their car or mortgage loan payments and want to avoid foreclosure. Also, this plan allows for the release of some unsecured debts, such as medical bills, or credit cards after successful repayment plan.

Who is Chapter 13 for?

Chapter 13 is specifically designed for individuals – not corporations – who have regular income. Also, the individual’s unsecured debts (such as credit cards and unsecured personal loans) must be less than $394,725 and secured debts (such as mortgages and car loans) less than $1,184,200 in order to qualify (as of 03/19/20; these amounts change periodically).

How does it work?

Chapter 13, or wage earner as it is commonly referred to, allows individuals with regular income to adjust what they owe. It lets the individual keep their property and pay off the debt over time, typically three to five years years. Under Chapter 13, an individual proposes a repayment plan, which if approved, will allow then eliminate or reduce certain debts, typically within three to five years. While the chapter 13 case is pending and while the payment plan is being followed, creditors cannot take action to collect or repossess. This means no more pesky calls, final notice letters, new liens, or wage garnishments. The Bankruptcy code provides the bankruptcy protection, known as the automatic stay from the moment of filing the bankruptcy case.  Individuals must take an online course prior to filing bankruptcy and another course after the filing,

What information is required?

Bankruptcy law requires full disclosure of all assets and liabilities. After an initial consultation with an attorney at the Law Office of Henry Hernandez, PA, the client will provided a detailed list of documents and information that are required including the following:

• A list of all creditors and the amount owed to each one.
• The source, amount, and frequency of the individual’s income.
• A list of all of the individual’s property.
• A detailed list of the individual’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

If the individual filing is married, the above information is also required for their spouse regardless of whether they are filing together, separately, or even if only one spouse is filing for bankruptcy.

Benefits of Filing for Chapter 13 in Florida:

Here we mentioned why filing for Chapter 13 is beneficial for Debtors in Florida:

• Flexibility in Debt Repayment: This law prescribes a structured repayment plan allowing clients to pay their debts over a period set within their capacity to satisfy.
• Property Retention: Debtors may keep their properties, such as their house or vehicles.
• Prevention of Foreclosure: Following a Chapter 13 filing, foreclosure proceedings may be maintained, giving the debtor a chance to make up for missed mortgage payments.
• Protection from Creditors: The court issues a stay order to block activities undertaken by creditors, such as wage garnishments, prosecutions, collection calls, or any form of intimidation.
• Protection for Cosigner: Chapter 13 protects co-signers from collection harassment, absolving them from any responsibility for the debtor’s repayment obligation.

Eligibility Criteria in Florida

To be eligible for Chapter 13 bankruptcy in Florida, you’ll need to meet the following criteria:

• Regular income: Debtors must have regular income, which may include wages, self-employment, and Social Security benefits.
• Debt limits: As of April 2024, your unsecured debts must be less than $394,725, and secured debts must be less than $1,184,200.
• Tax history: Debtors must have filed any required federal and state income tax returns for the previous four years.
• Credit counseling: Individuals must complete a credit counseling course, and obtain a certificate of completion, from an approved credit counseling agency within 180 days before file for Chapter 13 bankruptcy.
• No recent bankruptcy discharge: Individuals are not eligible for Chapter 13 bankruptcy if they received a discharge under Chapter 7 in a prior case within the past four years, or in a prior Chapter 13 case within the last two years.

The Chapter 13 Filing Process in Florida

Pre-filing needs:

• Credit counseling: Must complete a credit counseling course from an approved provider and obtain a certificate of completion.
• Gathering documents: You will need to gather documents, including proof of income, your tax returns or extension for tax returns, and any list of debts and assets.

Filing the Petition:

• Petition Submission: The petition must be filed with the U.S. Bankruptcy Court for the Southern District of Florida along with the required schedules and statements.
• Filing Fee: The filing fee currently stands at $313.
• Proposed Payment Plan: Propose a payment plan describing how you will pay the debts throughout the approved timeline.

341 Meeting of Creditors:

You are required to attend the 341 meeting. This is where the bankruptcy trustee and creditors can ask you questions regarding your financial situation and proposed repayment plan.

Plan Confirmation Hearing:

The judge will determine whether to approve your repayment plan if it is legally adequate and feasible.

Making Payments:

You will have to start your monthly payments to the bankruptcy trustee, who will distribute the funds to creditors in compliance with the repayment plan.

Completion and Discharge:

When you complete the repayment plan, any eligible debts remaining are discharged.

Working with Garcia Hernandez Law Firm

If you are a resident of Coral Gables or Miami-Dade County, the attorneys at Garcia Hernandez Law Firm have experience with Chapter 13 bankruptcy cases. The firm’s legal team will provide advice tailored to your needs to help you navigate the complexities of filing for bankruptcy. This firm will protect your rights as you strive to accomplish your financial goals.

Final Thoughts

Chapter 13 bankruptcy can be an important benefit to Floridians dealing with personal financial issues. It allows for debt relief while allowing you to keep your property. By educating yourself on the benefits and requirements of Chapter 13 bankruptcy, and with the help of a professional legal team, you can take the first steps toward achieving a more secure financial future.

Frequently Asked Questions for Chapter 13 Bankruptcy

Question 1. How does the repayment plan in Chapter 13 Bankruptcy operate?

Answer: Upon filing for Chapter 13 bankruptcy, a proposed repayment plan is submitted, stipulating how you must pay off your debts over a 3- to 5-year duration. You deposit funds with the bankruptcy trustee, spending a portion of that money to repay creditors as per the agreed repayment plan.

Question 2. Is lawyer representation mandatory for filing for Chapter 13 Bankruptcy in Florida?

Answer: Even if technically not mandated, attorney representation is beneficial. This is so because attorneys can guide you through the process whenever it appears difficult; they will ensure your rights are preserved, and then they can help you put together a realistic repayment plan.

Question 3. How Can Garcia Hernandez Assist with Chapter 13 Bankruptcy?

Answer: The attorneys at Garcia Hernandez possess extensive experience with Chapter 13 bankruptcy and can provide you with personalized legal assistance throughout the entire process. They will help in planning and filing all necessary documents concerning your Chapter 13 bankruptcy, assisting you in proposing a viable repayment plan, and providing representation in court to protect your rights.

Question 4. What Kinds of Debts Are Not Dischargeable in Chapter 13?

Answer: Generally, some types of debts are not dischargeable, such as alimony, child support, student loans, tax debts, and debts for forgery.