Chapter 13 Bankruptcy is a type of bankruptcy that allows you to develop a repayment plan for your debts based upon your disposable income each month. In some Chapter 13 Bankruptcy cases the debtor will pay back 100% of the debts they owe, but on a payment schedule that works better for them. In other cases, the debtor will only pay back a certain percentage of the debts owed. It all depends upon your disposable income and the types of debt you are dealing with. Chapter 13 Bankruptcy is not for everyone, but it is a very powerful option for the right situations and clients.
Chapter 13 Bankruptcy may be an option for you, it depends upon what you are trying to accomplish. For example, if you are behind on your mortgage and want to catch it up or you want to try and modify your mortgage, Chapter 13 may be your best option. Another situation where Chapter 13 is a great option is when you do not qualify for a Chapter 7 Bankruptcy. In situations such as this, the ability to develop a plan to repay your creditors based upon your disposable income is a life saver. The important thing to remember is that a Chapter 13 only works if you have actual disposable income to make plan payments, if you don’t have disposable income, Chapter 13 is not going to work. Disposable Income is money left over at the end of each month, after paying all necessary (and allowable) expenses to maintain you and your family. We will leave the discussion of Allowable Expenses for another day.
Needless to say, Chapter 13 Bankruptcy can be a very powerful option for you to use to gain control of your financial situation. If the Bankruptcy Court confirms your Chapter 13 Plan, your creditors have to abide by it, even if they are not paid back 100% of what you owe them. Chapter 13 Bankruptcy is not something to be entered into lightly, it is important to consult with an attorney so that you can make an informed decision about the process. It is not something you want to do without the advice and assistance of an experienced Bankruptcy Attorney. There are way too many pitfalls and traps that you can fall into.
If you are considering filing for bankruptcy, it is important that you speak with a bankruptcy attorney who can help you evaluate your potential homestead exemption and issues that may impact your exemption status in bankruptcy. Every bankruptcy case is different, so what has worked for one debtor may not necessarily work for another. If you are in Miami-Dade County or Broward County, Florida, please feel free to contact us to set up a FREE consultation to discuss your specific situation.
This blog post is made available for educational and informational purposes only and to promote a general understanding of the law, and not to provide specific legal advice. Use of this blog does not create an attorney-client relationship. Reading this post is not a substitute for obtaining legal advice based on the unique facts of your situation from an attorney licensed to practice law in your state. No representation is made regarding the current state of the information contained in this post. Examples that may be provided in this post are merely for illustrative purposes; the results in your case may be different and no results are guaranteed
Matthew Mazur, P.A. is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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