Shmucher Law, PL has assisted numerous individuals file for Chapter 13 bankruptcy in Broward, Miami-Dade and Palm Beach counties. A Chapter 13 bankruptcy is one that allows a debtor to setup a repayment plan for a period of three or five years in order to repay their creditors without forcing them to liquidate any assets.
Why File for Chapter 13?
There are a few reasons why an individual should consider filing for a Chapter 13 bankruptcy. They include the following:
Debtor Doesn’t Qualify for Chapter 7 Bankruptcy
The simplest reason is that the debtor does not qualify for Chapter 7 because they make too much money or have disposable income at the end of the month. Remember a debtor must pass certain tests in order to determine qualification into a Chapter 7 bankruptcy and if they cannot pass those tests the debtor would only be able to file a Chapter 13 bankruptcy.
Debtor has Numerous Assets
An advantage of a Chapter 13 bankruptcy is that it allows the debtor to not be forced to liquidate or turnover assets in the bankruptcy. Remember in a Chapter 7 bankruptcy a debtor is only entitled to keep certain assets and anything above and beyond those asset limitations may be sold by the bankruptcy trustee to pay off debts.
Debtor wants to Modify their Mortgage
In the Southern District of Florida Bankruptcy Division the courts have created a program called the Loss Mitigation Mediation program that allows a debtor and the secured creditor to sit down at mediation and attempt to modify the debtor’s mortgage. This option is one that gives debtors, who have attempted numerous modifications with the secured creditor, one final opportunity to modify the loan.
Debtor want to Strip Off their HOA, Second Mortgage, or Equity Lines of Credit
Chapter 13 bankruptcy gives the debtor the ability to strip off a second mortgage, equity line of credit or Home Owners Association Debt on underwater properties.
Debtor fell Behind on their Mortgage or Car Payments
Chapter 13 bankruptcy can help a debtor, who has fallen behind on their mortgage or vehicle payments, get back on track by allowing the debtor to cure (payback) their delinquent amount in a three to five year period.
In a Chapter 13 bankruptcy, the debtor doesn’t have to pay the attorney in full prior to filing, rather they can pay an initial payment, and then the attorney will get paid on a monthly basis throughout the debtor’s bankruptcy plan.
Typical Bankruptcy Advantages
Chapter 13 bankruptcy offers some the same advantages of a Chapter 7 bankruptcy. Upon the filing of the bankruptcy, the automatic stay shield will come into play and any lawsuits, garnishments, or foreclosure sales will be frozen. The debtor will also not be bombarded with creditor phone calls and letters.
Chapter 13 bankruptcy can provide the debtor with certain advantages that a Chapter 7 bankruptcy cannot. Each case is different and prior to filing a Chapter 13 bankruptcy in South Florida, a debtor should sit down with a qualified bankruptcy attorney.