Chapter 13 Bankruptcy
HOW IT WORKS
Chapter 13 bankruptcy is often referred to as
reorganization bankruptcy. While Chapter 7
bankruptcy wipes out most of your debts and you
relinquish property that isn't exempt from seizure by
your creditors, a Chapter 13 bankruptcy allows you to
keep the property, but you must use your income to pay
some or all of what you owe to your creditors over time.
Depending on the size of your debts and income that
period is from three to five years.
REPAYMENT
The most important part of a Chapter 13 is the
repayment plan. Your repayment plan describes in detail
how (and how much) you will pay monthly for all of your
debts.
In a Chapter 13, priority debts must be paid in
full. Priority debts are considered suffici
ently
important to jump to the head of the bankruptcy
repayment line. They include: child support and alimony,
wages you owe to employees, and certain tax obligations.
Plans must also include regular payments on
secured debts, such as a car loan or mortgage, as well
as repayment of any arrearages on the debts you’ve
fallen behind in.
Chapter 13 plans must show that any disposable
income – after making these required payments – will go
towards repaying unsecured debts, such as credit card or
medical bills. Unsecured debts do not have to be repaid
in full – or at all, in some cases. But disposable
income must go towards their repayment.
The length of your repayment plan depends on how much you earn and how much you owe.
David T. Seif represents clients throughout the state of Florida including the cities of Boca Raton, Boynton Beach, Carol City, Cooper City, Coral Gables, Coral Springs, Davie, Deerfield Beach, Delray Beach, Fort Lauderdale, Hialeah, Hollywood, Jupiter, Lake Worth, Miramar, Miami, Oakland Park, Palm Beach, Palm Beach Gardens, Palm Springs, Pompano Beach, and Rivera Beach
Broward County - Miami-Dade County - Palm Beach County