Chapter 13 Bankruptcy

The majority of Floridians filing bankruptcy will do so under Chapter 7; however, in certain circumstances, an individual may only qualify for a Chapter 13 in Florida. These are two primary types of individual bankruptcies that people seek shelter under. While both can offer you the financial fresh start in the long run, they each have their own unique set of rules, guidelines, and procedures that must be followed. When you are speaking with your Boca Raton bankruptcy lawyer, they will be able to offer you guidance on whether a Chapter 7 bankruptcy or a Chapter 13 bankruptcy will be able to meet all of your financial goals.

Determining Whether You Qualify for A Chapter 13 Bankruptcy in Florida

In order to file for a Chapter 7 bankruptcy in Florida, a person must pass what is called the means test. This is a mathematical computation that will analyze your gross and or net income versus that of the median income for your state. Should your income be below that of the median income for your state, you will in most cases be able to file for a Chapter 7 bankruptcy. For some people a Chapter 7 bankruptcy is exactly what they want and need; however for others a Chapter 13 might suit their ultimate goals better.

A person cannot have more than $1,000,000 of secured debt or cannot have more than $335,000 of unsecured debt and be eligible for Chapter 13 bankruptcy. If you debt levels exceed either of these two thresholds, you and your Boca Raton bankruptcy attorney will need to look at an alternative Chapter of bankruptcy to file under.

Assuming that you are eligible to file under Chapter 13 in Florida, there are several steps that will need to take place. Like a Chapter 7 bankruptcy, prior to filing a Chapter 13 bankruptcy you must take a credit counseling course. Unlike Chapter 7 you can pay your Chapter 13 legal fee over time with monthly payments as part of your court ordered payment plan. 

The Chapter 13 process differs from the Chapter 7 process in that the Chapter 13 you can keep exposed assets as long as you “repurchase” them from the bankruptcy trustee over the course of the 36 month or 60 month payment plans. The payment plan that the court will prescribe will be predicated upon your available monthly income. It is for this reason that a Chapter 13 bankruptcy is known as a wage-earners bankruptcy. Chapter 13 bankruptcies are complex in nature. If you are contemplating filing a Chapter 13 bankruptcy in Boca Raton you should consult with an experienced attorney who is familiar with the intricacies of the process. 
With a Chapter 13 you are able to save delinquent mortgage by including your arrearages in your monthly payment. Furthermore you can strip a second mortgage lean from your homestead property if the first mortgage exceeds the value of the property. Finally, in a Chapter 13, you can in certain circumstances “cram down” negative equity in investment properties and vehicles. 

To continue learning about Chapter 13, read about the bankruptcy repayment plan.