Chapter 13 Bankruptcy For Individuals In Pinecrest And Miami
When you file a Chapter 13 Bankruptcy, you enter into a three- to five-year plan to make monthly payments to a bankruptcy trustee who disburses that money to your creditors. It lets you catch up on your past-due payments. The plan requires you to pay the trustee all of your excess income. The concept of excess income in bankruptcy law can be a confusing one, but, in general, it is intended to leave you with just enough money to pay for all of your necessary living expenses. When you file a Chapter 13 bankruptcy, you can expect to live a frugal lifestyle for a few years. Luxuries are not permitted. But with proper guidance from an experienced bankruptcy attorney, the plan will allow you to maintain a comfortable lifestyle.
Our attorney can help you. At Mark S. Steinberg, P.A., we represent clients in Miami and throughout Miami-Dade County with all aspects of Chapter 7, Chapter 13 and Chapter 11.
Chapter 7 Vs. Chapter 13: Which Is For You?
Why file a Chapter 13 bankruptcy rather than a Chapter 7? People file a Chapter 13 instead of Chapter 7 because they have too much income to qualify for Chapter 7, because they are trying to save a home that is in foreclosure, or because they want to keep some of their nonexempt assets that they would have to give up in a Chapter 7 bankruptcy. Most people who file for bankruptcy can’t afford to pay 100% of their creditors, even over five years. But no matter how much or how little you pay, as long as you make all the payments you agreed to make under the plan, the court will forgive the remaining unpaid balances of any debts that would have been forgiven in a Chapter 7 bankruptcy.
There is one other important distinction between Chapter 7 and Chapter 13 bankruptcy. There is no limit to the amount of debt you can have in a Chapter 7. The only qualifying issue is your income. However, there are limits to the debt you can discharge in a Chapter 13 bankruptcy. Currently, to qualify for a Chapter 13 bankruptcy, an individual’s unsecured debts must be no more than $383,175, and secured debts must be no more than $1,149,525. These amounts are reviewed on a periodic basis and may change. If you don’t qualify for a Chapter 7 because you have too much income and you don’t qualify for Chapter 13 because you have too much debt, then your only remaining option may be to file Chapter 11 bankruptcy.
Structuring A Chapter 13 Bankruptcy Repayment Plan
A Chapter 13 plan organizes your debts into categories. Priority debts, such as certain taxes or domestic support obligations, must be paid in full. Secured debts, such as mortgages or car loans, can be paid over time through the plan. Unsecured debts, such as credit cards or medical bills, often receive a portion of what you owe based on your income and assets.
A plan usually lasts between three and five years. During that period, you make a single monthly payment. The trustee distributes those funds according to the plan that the court approves. When you complete all payments, any remaining eligible unsecured debts are discharged. This gives you a structured path toward a financial fresh start without losing the property that matters most to you.
Protecting Your Home And Vehicle
Chapter 13 helps you protect important assets. If you are behind on your mortgage or car loan, the plan lets you cure the defaults over time. This protection stops foreclosure and prevents repossession while you work through the plan. It allows you to keep living in your home and keep driving your car as long as you stay current with the ongoing payments and the plan requirements.
We focus on practical solutions that protect your stability. Our goal is to help you understand exactly how the payments are calculated and how the plan safeguards your assets under Florida law.
Common Questions About Chapter 13 Repayment Plans
Before someone commits to a Chapter 13 repayment plan, certain concerns come up again and again. These questions help you understand how the plan protects your assets, how long the process lasts and what happens to your income during the case.
How will a Chapter 13 repayment plan affect my assets, such as my home or car?
A repayment plan lets you address missed payments on secured debts. This includes mortgages and car loans. The plan helps you cure arrears over time. It also protects you from foreclosure or repossession as long as you follow the terms and keep up with ongoing payments.
How long will I be making payments under a Chapter 13 plan, and what happens after the term is over?
Most plans last three to five years. When you complete the plan and make every required payment, the court discharges the remaining eligible unsecured debts. You receive a fresh start and can move forward without those old balances.
Will I lose my tax refund while I am in a Chapter 13 plan?
Some plans require you to turn over part or all of your tax refund. The trustee may use those funds to pay creditors based on the rules in your plan. The exact treatment depends on your income, your budget and the structure of your case. We will review this with you before we file, so you know how refunds will be handled.
What debts are covered in a Chapter 13 plan, and what is a priority claim?
A repayment plan covers most consumer debts. This includes credit cards, medical bills and secured debts. Priority claims are certain debts, such as recent taxes or domestic support payments. These must be paid in full during your plan. After priority and secured debts are handled, your unsecured debts receive whatever amount is left according to the plan.
Schedule Your Free Chapter 13 Bankruptcy Consultation Today
Speak with us about bankruptcy in a free, confidential initial consultation. You can begin by calling our Miami office at 786-744-4746 or by using our online contact form.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.