When potential new clients come to see me to discuss chapter 13 options they typically have done some reading online about the process. One of the biggest misconceptions that clients get confused is how long the lifespan of a Chapter 13 bankruptcy is. The simple answer is that your Chapter 13 bankruptcy is either for three years (36 monthly payments) or five years (60 monthly payments) and your monthly income will help decide which plan you will likely be in. Your income is to total amount of gross income that you derive each month (include your spouse if you are married).
Three Year Chapter 13 Plan
Debtors who are under the median Florida income for the same family size are eligible to file a three year Chapter 13 plan. However, debtors can file a five year Chapter 13 plan if they wish. Debtors may require a longer plan in order to play catch up on their arrearages on secured debt. Say for example you were playing catch up on a mortgage and you were $10,000 behind… in a three-year plan you would need to pay an additional $277.78 a month or in a five-year plan you would be $166.67 so the lower monthly payment may be beneficial to the debtor.
Five Year Chapter 13 Plan
Debtors who are over the median Florida income for the same family size are only eligible to file a five year Chapter 13 plan. Plain and simple if you are over the median income you are in for five years, with very few exceptions.
If you are thinking of filing a Chapter 13 bankruptcy in South Florida then please contact bankruptcy attorney Ofer Shmucher of Shmucher Law, PL by calling 305-741-5553 to schedule a free consultation in our Miami office. We represent debtors in Chapter 7 and Chapter 13 bankruptcies in Broward and Miami-Dade Counties.