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Florida Chapter 13 Bankruptcy FAQ

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Florida Chapter 13 Bankruptcy FAQ

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What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a reorganization bankruptcy in which your debts will be reorganized and you will only need to make a single monthly payment (unless you have debts that you do not include in your bankruptcy). Unlike Chapter 7, in which your nonexempt assets will be sold off to pay your debts, Chapter 13 allows you to keep your property as long as you stay current on your payments.

How Does Chapter 13 Work?

In Chapter 13 bankruptcy, the court reorganizes your debts and approves a payment plan for you to pay them off. Your payments will be made to a bankruptcy trustee who then will distribute these payments among your creditors. Certain debts may be paid off in full, while others may only be paid off partially. Your bankruptcy plan will last anywhere from three to five years. At the end of your repayment plan, your remaining debts will likely be discharged. While you are making payments, your creditors cannot try and collect from you, which means they cannot call, send letters, repossess property, or file lawsuits to collect on a debt.

Can Chapter 13 Prevent Foreclosure?

Many people start looking into bankruptcy when they realize the bank is going to foreclose on their house. The good news is that, in some cases, bankruptcy can help avoid foreclosure. When you file for Chapter 13, your mortgage arrears (the amount you are behind on your mortgage) can be included in your bankruptcy, giving you the lifetime of your plan to get caught up. To keep your home, however, you’ll need to stay current on your payments in the future. As a result, if you plan to use Chapter 13 to avoid foreclosure, be sure that you can actually afford your payments and that getting behind was the result of a temporary situation.

Call a Melbourne, Florida Bankruptcy Lawyer Today to Schedule a Free Consultation

If you are having trouble keeping up with your bills and are already in debt, you should discuss your situation with an attorney as soon as you can. Attorney Sean Harnage is dedicated to helping people obtain financial freedom through bankruptcy and will review the facts of your case at no cost to you. To schedule your free consultation, call our office today at 321.549.7886 or contact us online.