Across Florida, 37,776 total bankruptcies were filed in 2020 — 19.26 percent fewer than in 2019. And in Hillsborough County, 2,648 total bankruptcies were filed in 2020 compared with 3,511 in 2019, according to the U.S. Courts Administrative Office.
Although the number of individuals filing for bankruptcy has been decreasing in recent months, this doesn’t mean that Florida residents are free of unmanageable debt. If you find yourself overwhelmed by creditor harassment and mounting debt, consider this: Chapter 13 of the bankruptcy code allows individuals and families to retain most, if not all, of their possessions while they work out a manageable repayment plan.
If you’re in the Tampa area, or in Miami, Jacksonville, or Orlando, The Law Offices of David K. Blazek, P.C. stands ready to help you navigate the bankruptcy process to get a fresh start. Chapter 13 bankruptcy could be a life-saving option for you and your family. The firm is proud to serve Florida residents as well as those in Atlanta, Macon, and Columbus, Georgia.
The U.S. bankruptcy code specifies different options for dealing with overwhelming debt loads. Each option is known by the chapter in which it is described. Chapter 13 is a bankruptcy option that focuses on reorganizing one’s debts rather than liquidating assets to get out from under the cloud of debt. Liquidation is covered under Chapter 7.
Unlike liquidation under Chapter 7, Chapter 13 allows the filer to retain most, if not all, of their assets as they pay off their debts through consolidation and reorganization. In a nutshell, Chapter 13 looks at the filer’s disposable income to determine if there is enough there to consolidate all existing obligations and pay them off, wholly or in part, over a three- to five-year period.
There are, however, debt limits. You cannot have more than $394,725 in unsecured debts, or more than $1,184,200 in secured debts. If you exceed those limits—for example, if your home mortgage is for $1.3 million—you cannot use Chapter 13. Chapter 11 bankruptcy exists for those with higher debt loads.
If you are behind on a car or house payment, you could be subject to repossession or foreclosure. When you file for Chapter 13, the bankruptcy court will issue what is called an Automatic Stay, which prohibits creditors from contacting you and puts a hold on all repossessions and foreclosures. The hold on creditors’ reclaiming their secured assets is only temporary, however, as they can file for permission to proceed.
In Chapter 13 bankruptcy, you must have enough income to cover both your basic needs plus the reorganized debt load. That is why the success of a Chapter 13 reorganization hinges largely on how much “disposable” income you have that can be used over the three- to five-year repayment period. That’s why Chapter 13 is often referred to as “the working person’s bankruptcy option.”
To qualify for Chapter 13 Bankruptcy, you need to meet the following criteria:
Meet the debt requirements as noted above
Receive a regular and stable source of income sufficient to pay the proposed payment plan
Take an approved credit counseling course and provide a certificate of completion along with your filing
In a reorganization bankruptcy, unsecured debts such as credit cards can be reduced, while secured debts like mortgages and car notes cannot be reduced. Child support payments, tax debts, and educational loans must also be paid in full.
Once your reorganization plan is approved, an appointed bankruptcy trustee will handle the creditors covered by your plan. You will make a monthly payment to the trustee, who will pay the creditors. While you’re making your payments, you cannot undertake new credit obligations without the permission of the bankruptcy court. Until your repayment obligations have been met in full, you will not be discharged from bankruptcy or supervision by the court. However, at the end of three to five years, you’ll be totally free of all unsecured debts and ready for a fresh start.
Though it’s possible to file and undertake a Chapter 13 reorganization on your own, it’s going to prove to be more than most people can handle. You will have to confer repeatedly with the trustee, attend a meeting of creditors all on your own, and come up with a repayment plan that will be approved. On top of being overwhelmed by the nightmare of your debt obligations, this is not something you really want to undertake on your own.
At The Law Offices of David K. Blazek, P.C., you have the opportunity to work with an experienced bankruptcy attorney who can walk you through the bankruptcy process step by step. If you’re considering Chapter 13 bankruptcy, call or reach out today to schedule an initial consultation.
The Law Offices of David K. Blazek, P.C., can handle your filing and your other obligations under Chapter 13 while you attend to the needs and requirements of your daily life. Attorney Blazek has handled bankruptcy filings for countless others just like you. If you’re in Florida or Georgia and face creditor harassment, insurmountable debt, and more, reach out today for your fresh start.