Chapter 13 bankruptcy is a restructuring plan or repayment plan. If you are behind on your mortgage payment, or you are about to be foreclosed on, you may file chapter 13 bankruptcy to save your home. In chapter 13, you file a plan with the court detailing how you will pay back what you owe. Then, once a month, you send the Trustee a check for your mortgage payment and an agreed upon amount toward your arrears. This goes on for 3 to 5 years. Once you are caught up, you continue your mortgage payment as before with no retribution on the part of the bank or mortgage company.
Many times the debt to be paid back may be negotiated to be less than that which is currently owed. In a Chapter 13 bankruptcy, a debtor proposes a repayment plan to the creditors, over a 3 to 5 year period, offering a good faith proposal to pay off all or part of the debts from the debtor’s future income.
A Chapter 13 bankruptcy can:
Prevent the foreclosure of a home;
Make up delinquent car or mortgage payments;
Pay back taxes;
Stop interest from accruing on your tax debt (local, Florida state, or federal);
Keep valuable property which is non-exempt in a bankruptcy;
And manage other financial situations which may be affected by a Chapter 13 bankruptcy proceeding.
As a law firm providing chapter 13 bankruptcy legal services, we are prepared to represent you in even the most difficult of legal challenges you may be facing. Our law firm knows how to apply the law to your specific legal needs and goals. When you are involved in, or contemplating filing for chapter 13 bankruptcy… we are here to help you. Call 407.344.3400 to schedule a confidential consultation to discuss your bankruptcy options.
Creditors often will work with debtors in a Chapter 13 bankruptcy, as Chapter 13 provides the opportunity to recover funds from you, as apposed to a Chapter 7 bankruptcy where the ability to recover the debt may be eliminated.
Those who are more likely to file for a Chapter 13 bankruptcy are individuals who seek to hold on to possessions such as a home, multiple vehicles, or other property or assets.
In a chapter 13 bankruptcy there are two kinds of assets: assets that the individual owns free and clear and assets that secured creditors have interests in. A person that successfully completes a chapter 13 will not have to give up any property that is unencumbered. An individual also will likely be able to keep encumbered property, such as a house or car, if they can propose and implement a chapter 13 plan that will provide for the payment of the amount that an individual has defaulted on.