When debts start accumulating, not only might you have to deal with aggressive creditors, but you may also be concerned about finding the best way to pay off your debts. Filing bankruptcy may be a suitable path to regain financial stability. A Chapter 13 bankruptcy lawyer representing clients in Orlando can help you explore the legal options available for your case.
Filing for bankruptcy in Florida is not an easy decision. At Z. Hernandez Law, we understand what you are going through and we are committed to helping you find the financial fresh start you deserve. If you are filing bankruptcy in the Orlando Division, we may be able to help.
Call us today at (407) 900-8490 to book a consultation with a bankruptcy lawyer near you. We represent both English and Spanish speaking clients.
Chapter 13 Bankruptcy Orlando
Chapter 13 bankruptcy, also known as a wage earner’s plan, is a type of bankruptcy for individuals with regular income. Filing Chapter 13 in Florida allows people to create a plan (based on their disposable income) to repay all or a portion of their debts.
In simple terms, a Chapter 13:
- Gives you more time to repay your debts.
- Allows you to reorganize your debts by priority.
- Allows you to repay your debts through affordable installment payments.
Chapter 13 bankruptcies in Florida last between 3 to 5 years. The duration of your repayment plan is determined by assessing your current monthly income against Florida’s median income.
For example, as for 2022, the median income for a single individual is $55,681.
If your income is greater than this amount, your repayment plan is likely to last five years. However, if your income is lower, your plan may extend for three years or you may be eligible to change your filing to a Chapter 7 bankruptcy.
Although you are paying your debts over an extended period, filing Chapter 13 in Florida does not necessarily mean that all debts need to be paid in full. For some secured debts, you may only be required to pay the current value of the property, which may be lower than the price you paid due to depreciation.
On the other hand, your unsecured creditors (such as medical debts, personal loans, and credit card debts) should be paid at least as much as they would have received if your property was sold under Chapter 7.
How to qualify for Chapter 13 in Florida
Under federal law, there are certain requirements debtors must meet to file Chapter 13 bankruptcy in Florida:
- Being an individual or unincorporated business.
- Having less than $2,750,000 in combined secured and unsecured debts.
- Completing credit counseling within 180 days before filing for bankruptcy.
- Not having a previous bankruptcy case dismissed within 180 days of filing.
- Filing the corresponding forms and paying the filing fee.
- Filing a repayment plan with the petition or within 14 days after filing your case.
Chapter 13 provides many benefits for debtors. However, you need to ensure that this type of bankruptcy is the most suitable for your financial situation. A Chapter 13 bankruptcy lawyer serving Orlando or surrounding areas can assess your case. If you would like to explore this debt relief option, book a consultation with Z. Hernandez Law.
How much does it cost to file Chapter 13 in Florida?
The fee for filing Chapter 13 bankruptcy in Florida is $313. This amount must be paid when filing the case. In some situations, the Bankruptcy Court may divide this fee into four installments.
Debtors filing for bankruptcy in the Middle District of Florida should pay their fees by money order or cashier’s check.
Benefits of Chapter 13 in Florida
Since they have to pay their debts over 3 to 5 years, Chapter 13 may not look as appealing as Chapter 7 for many debtors. However, this type of bankruptcy provides many advantages that you may want to consider.
Some benefits of filing Chapter 13 in Florida include, but are not limited to:
- Protecting your assets. When filing Chapter 13 in Orlando, debtors can organize and prioritize their debts. This allows them to catch up on late payments and keep making affordable installments to keep their property. Unlike a Chapter 7 case, Chapter 13 bankruptcy does not liquidate your house, car, and other assets to cover your debts.
- Allows you to pay what you can. Your repayment plan is based on your disposable income. As a result, your payments should be reasonable amounts that you can handle. If over time your income changes, your repayment can be modified to better reflect your ability to pay.
- Allows you to discharge more debts. In Florida, Chapter 13 bankruptcy allows debtors to discharge certain debts that cannot be relieved in a Chapter 7 case. Debts that can only be discharged in a Chapter 13 include:
- Debts for willful and malicious injury to a property.
- Debts incurred to pay non-dischargeable tax.
- Debts arising out of property settlements in separation or divorce proceedings.
- Stops debt collection actions. When filing bankruptcy, most creditors are not allowed to collect debts or pursue any collection actions for a period of time. This can stop any foreclosure or repossession proceedings.
- Consolidates your debt into one payment. If you are considering bankruptcy, you may have debts with multiple creditors. When filing Chapter 13, debtors make one monthly installment to the trustee, who is in charge of paying their creditors.
Converting Chapter 13 to 7
Given that it is a repayment plan, the success of a Chapter 13 bankruptcy depends on your ability to make your payments. If for some reason you are not able to continue with your repayment plan, you may be able to convert your current bankruptcy to a Chapter 7.
Among other things, to qualify for this conversion you must pass the means test and prove that you do not have any disposable income to repay your creditors. Converting your case to a Chapter 7 bankruptcy in Florida can lead to a quick discharge. However, some of your property may be affected.
An Orlando bankruptcy lawyer can explain to you what to expect and how to protect your assets when converting a Chapter 13 to Chapter 7. If you want to explore this path, call (407) 900-8490 to schedule a consultation with an attorney at Z. Hernandez Law.
Chapter 13 Statistics in Florida
- There were 8,339 Chapter 13 bankruptcy cases filed in Florida, representing 26.4% of cases filed in 2021.
- While approximately 96.0% of all Florida 2021 cases were consumer bankruptcies, nearly 99.2% of those Chapter 13 cases were consumer bankruptcies (individuals or families).
- Florida’s Chapter 13 filing rate per capita was 38.2 per 100,000 in 2021.
- Between January and August of 2022, the Southern and Middle District of Florida Courts reported an increase in Chapter 13 case filings over the same period of the previous year:
- 3,344 vs 3,045 Ch13 cases filed in Southern District of Florida (9.8% increase).
- 2,498 vs 2,140 Ch13 cases filed in Middle District of Florida (16.7% increase).
Speak to a Chapter 13 Lawyer Serving Greater Orlando
According to the American Bankruptcy Institute, over 80% of Chapter 13 cases filed without an attorney fail within the first six months. Bankruptcy is complicated and what you do not know about it may have negative consequences for you or your case. An Orlando bankruptcy lawyer can help you navigate through this process.
At Z. Hernandez Law, we represent clients filing for bankruptcy in Orlando and surrounding areas. If you are looking for a Chapter 13 attorney near you, we may be able to help. Contact us today to schedule an appointment.
FAQ’s About Chapter 13 in Florida
Debtors can file for Chapter 13 after a Chapter 7 bankruptcy. However, debtors who have received a discharge under Chapter 7, must wait four years before being eligible for a discharge under Chapter 13 bankruptcy. Additionally, debtors must wait 180 days after having a bankruptcy filing dismissed.
According to federal law, completing a Chapter 13 bankruptcy takes between 3 to 5 years. The duration of a Chapter 13 is usually determined by your ability to repay your debts. For example, if your median income is lower than the state median, your repayment plan is likely to last 36 months.
The amount of money you pay back depends on the type of debt.
– Priority debts such as child support and the costs of bankruptcy proceedings are paid in full.
– With some secured debts the debtor may only need to pay the current value of the collateral.
– Unsecured creditors receive at least as much as they would have received under a Chapter 7.
Should you have more specific questions about your case, speak to an Orlando bankruptcy attorney.
Filing Chapter 13 bankruptcy allows debtors to catch up with late payments and keep their property, such as their vehicle. However, if a car was legally repossessed before filing the bankruptcy case, creditors are allowed to retain the property.
When you file bankruptcy, the automatic stay provision prevents creditors from any repossession proceedings. As long as you make the installments set on your repayment plan, you are able to keep your vehicle.
If your car or vehicle was repossessed right before you filed for Chapter 13 bankruptcy, you may still be able to recover it. An experienced Orlando bankruptcy attorney can help you protect your rights and assets.
