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How does Chapter 13 bankruptcy work in Florida?

On Behalf of | Mar 28, 2024 | Firm News

Many people in Florida decide to file for Chapter 7 bankruptcy to liquidate their assets in exchange for having many of their debts forgiven. However, not everyone meets the criteria for a Chapter 7 bankruptcy. People who do not earn a low enough income to qualify for Chapter 7 bankruptcy may find Chapter 13 bankruptcy to be a solid option.

How does Chapter 13 bankruptcy work?

Unlike with Chapter 7 bankruptcy, those who file for Chapter 13 bankruptcy will be expected to reorganize their debts and repay them over time. If you decide to file for Chapter 13 bankruptcy, you will first have to complete a credit counseling course with an approved agency. You will then have to pay a fee to file your petition, along with several other documents. and propose a repayment plan with the court for approval. Your plan will generally inform creditors how you will payback your various unsecured debts, including:

  • Credit card debt.
  • Alimony and/or child support.
  • Medical debt.
  • Car loans.
  • Taxes.

Once the court approves your plan, you will typically make monthly payments to the trustee of your bankruptcy, who will then disburse your payments to your creditors, as specified in your plan. Generally, a Chapter 13 repayment plan will last for three to five years.

What happens next?

Following the completion of your plan, the trustee will submit an accounting to the court and the court will issue an order of discharge. Once the order is in place, you will no longer be responsible for any of the debt that was discharged.

Filing for Chapter 13 bankruptcy can be difficult and the process can take some time, but it can give you an opportunity to stop the foreclosure process on your home and repay some of your debt.



Kingcade & Garcia | A Miami Law Firm