What Are the Requirements for Chapter 13 Bankruptcy?

If you are considering filing for chapter 13 bankruptcy in St. Petersburg, it is important to know if your situation meets the requirements for filing. Chapter 13 establishes a three-to-five-year plan in which the debtor pays back their debt in monthly installments. Many people choose chapter 13 over 7 if they want to prevent foreclosure, stop debt collection, make up missed payments, and more. If the debtor makes their scheduled payments, at the end of their term, their applicable debt will be discharged.

Regular Income

To qualify for chapter 13 bankruptcy, the debtor must have a regular source of income as well as disposable income they can apply towards their debt repayment plan. A debtor usually completes a means test to determine how much will be repaid. Everything paid to creditors during chapter 13 has to at least equal the amount the creditor would have received through chapter 7.

Secured Assets

Many debtors in St. Petersburg who choose chapter 13 do so because they have secured assets such as a car or a home they wish to keep. If they have more equity based on their secured assets than they would be able to protect with Florida’s exemptions, then chapter 13 is often a better choice as well.

Making Up Payments Over Time

Chapter 7 liquidates assets to pay back debts when a debtor doesn’t have the money or will not likely have it in the future. Chapter 13 bankruptcy, on the other hand, reorganizes the debt and creates a repayment plan because the debtor can repay the debts, they just need more time. Therefore, those with valuable nonexempt property are more likely to avoid chapter 7 and opt for 13.

Repayment Plan

When filing a chapter 13 bankruptcy, debtors in St. Petersburg must propose a repayment plan schedule that demonstrates how they will repay their debts. This plan will demonstrate how much money will go towards their monthly debt repayment amount after considering other monthly expenses. The plan will also explain how the repayments will be divided up amongst the creditors. For the most part, priority claims are paid in full while unsecured claims are paid in part.

Contact Berkowitz & Myer for Chapter 13 Bankruptcy Assistance

If you are considering filing for chapter 13 bankruptcy in the St. Petersburg area, contact the law firm of Berkowitz & Myer. Our attorneys have the education and experience to help debtors through this complicated process. To schedule a consultation with a professional, call us today at (727) 344-0123 or contact us online.

How to File for Bankruptcy the Pain-Free Way in St. Petersburg

If you’re researching how to file for bankruptcy, then you’re likely in a financial situation requiring serious intervention. Before submitting the documents necessary to declare yourself bankrupt, you’ll need a plan to make the process as simple and painless as possible.

1. Learn About Bankruptcy and the Different Chapters

Before you learn how to file for bankruptcy, it’s important to know there are different chapters of bankruptcy in Florida. However, most people in St. Petersburg will likely file chapter 7 or 13. Chapter 7 eliminates most unsecured debts in a few months by giving up non-exempt property like houses or cars. Chapter 13 takes longer, usually a few years, but instead of relinquishing property, establishes a repayment plan to pay back the debt in monthly installments.

Certain citizens must complete a “means test” to establish which chapter of bankruptcy they qualify for. The calculation accounts for multiple aspects of the debtor’s financial situation, including income, and the amount of debt. If the debtor’s annual income is less than Florida’s median income for the size of their household, as long as the debtor meets other qualifications, they can generally choose chapter 7 or 13. If the income is higher than the median, the debtor must list expense deductions to identify the disposable income for the next five years. The test determines if chapter 7 or 13 is an option.

Once you determine which chapter is appropriate for your situation, you can begin gathering and completing paperwork.

Determine Exemptions

Federal bankruptcy code provides certain exemptions, but Florida code doesn’t permit many of the federal allowances. Instead, you can only use Florida state exemptions. There are federal “non-bankruptcy” exemptions you may be able to utilize, including wages, social security benefits, civil service benefits, and veterans benefits. If you’re uncertain what property is exempt, talk to an experienced attorney in St. Petersburg for assistance.

Go to Credit Counseling Before Filing

Before filing for bankruptcy, you must attend a credit counseling program approved by the St. Petersburg court district. Not every counseling agency is accredited by the court, and to fulfill your pre-filing requirement, you must receive a certificate from an approved source.

Gather and Complete Financial Paperwork

If you’ve researched how to file for bankruptcy, you’ve likely noticed that it’s not as simple as submitting a form and calling it done. Instead, the process requires fifty-plus pages of paperwork with forms listing debts, income, expenses, assets, and collateral. For Chapter 13, you’ll need to submit a repayment plan with your paperwork. You’ll also need to provide information regarding secured debts.

It is possible to do this yourself, but many people in St. Petersburg choose a local attorney to provide professional assistance when they want to know more about how to file for bankruptcy.

File Forms with the Court

After completing all paperwork, you can file the forms with the court. Then, you may need to meet with a court trustee. Filing stops liens, foreclosure, creditor harassment, debt collection, and more. Once the repayment process is complete, you’ll attend a pre-discharge session for credit education. Afterward, you’ll receive a discharge order from the court officially eliminating certain debts. From then on, you can resume your life in St. Petersburg.

Learning How to File for Bankruptcy? Call Berkowitz & Myer for Help

If you need assistance while learning how to file for bankruptcy, talk to an experienced attorney at Berkowitz & Myer. Call us at (727) 344-0123 or contact us online to schedule a consultation.

Bankruptcy: Important Things to Know About Chapters 7 and 13

Bankruptcy may be intimidating for those who are not familiar with the process. But with the help of a bankruptcy attorney in St. Petersburg, you can manage your debt and get back on the right foot. People who pursue bankruptcy often do so because filing can:

  • Protect your home from foreclosure
  • Stop debt collection attempts
  • Prevent utility companies from cutting off power and water
  • Give you more time to readjust your debts

Chapter 7 discharges your debt, but this does not include student loan debt. There are unique circumstances that exist for student loan debt, but largely, you are responsible for paying it off. If the debtor or their dependents are under undue hardship, they may be able to seek a discharge for their student loan debt.

Whether you file for chapter 7 or 13, you must fill out and complete all necessary forms. Everyone who files for bankruptcy must complete the necessary forms for the federal government, which may include:

  • Voluntary Petition for Individuals Filing for Bankruptcy
  • Summary of Your Assets and Liabilities and Certain Statistical Information
  • Statement of Current Monthly Income
  • Chapter 7 Means Test Calculation
  • Chapter 13 Calculation of Your Disposable Income

Florida Bankruptcy

In Florida, residents cannot use federal exemptions, and must instead use the state’s exemptions. Potential exemptions may include:

  • Homestead exemptions
  • Certain personal property up to $1,000
  • Up to $1,000 in motor vehicle equity
  • Up to $4,000 in personal property if not using the homestead exemption
  • Certain pension and retirement funds like 401ks and Simple IRAs

Your St. Petersburg bankruptcy attorney can go over the various exemptions available and help you determine which ones are applicable to your situation.

What You Need to Know When Filing for Bankruptcy

When you file, you must submit a repayment plan detailing your debts like child support, vehicle loans, mortgages, and tax liens and how you plan to repay them. A bankruptcy attorney in St. Petersburg can help you devise a plan that allows you to comfortably pay your debts. Unsecured debts, like medical bills and credit cards, must be less than $336,900 and secured debt, like mortgages, must be less than $1,010,650.

Filing for bankruptcy will leave a lasting impact on your credit; it will stay on your record for ten years. This can influence your ability to loan a car, rent a home, get a credit card, and more.

To speak with a bankruptcy attorney in the St. Petersburg area, trust Berkowitz & Myer. Call us today at (727) 344-0123 or contact us online to schedule a no-cost consultation.

How Does Chapter 13 Bankruptcy Affect Your Credit?

You may be interested in utilizing Chapter 13 bankruptcy to get out from under your debt, but perhaps you have been concerned with the effect bankruptcy might have on your credit. That is an understandable concern, but it is important to remember that in many cases, the benefits of filing for Chapter 13 far outweigh the negative impact on your credit report. In addition, as people who are considering Chapter 13 are already in financial trouble, Chapter 13 will ultimately improve their credit score—even though the bankruptcy will typically appear on their report for 7 years. To learn whether Chapter 13 can help you, contact our office today to speak with a St. Petersburg Chapter 13 attorney

Bankruptcy’s Impact on the Credit Score and Credit Report

Almost every consumer in the United States has a credit score and corresponding credit report. Your credit score is a number based on your creditworthiness. A lender may use a credit score to determine whether to loan you money. Some of the loans typically take into account your credit score include the following:

  • Credit cards
  • Mortgages
  • Auto loans
  • Personal loans
  • Business loans

A credit report keeps track of your credit history, so that potential lenders may see what kind of credit you already have available and if there has been any delinquency.

The credit score is a calculation that takes into account many factors, with bankruptcy filings being only one factor among many that will affect the credit score. Therefore, you cannot know in advance the exact effect on the credit score that filing a Chapter 13 bankruptcy will have. What is known is that many people contemplating a Chapter 13 bankruptcy will already have poor credit due to missed payments and default. A Chapter 13 bankruptcy will reorganize the debt, and successful plans will bring the debt out of default. Getting credit back on track by making timely payments will have a positive impact on your credit score, particularly over long periods of time.

Obtaining Credit After Bankruptcy

It is true that a Chapter 13 bankruptcy filing can remain on a credit report for seven from date of filing. Some Chapter 13 filers have been able to obtain new lines of credit within one to three years from the date of filing. For instance, filers interested in purchasing a new home can qualify for a Fair Housing Administration mortgage after having made at least twelve on-time payments under a Chapter 13 bankruptcy plan. This is known as a “seasoning requirement.” Fannie Mae, the nation’s largest mortgage lender, has a two-year seasoning requirement. While many people believe that filing bankruptcy dooms a person to never qualifying for credit again, this is simply untrue.

A Lender’s Perspective on Chapter 13 Bankruptcy

A lender, in determining whether to extend new credit to a consumer, will review the person’s credit report and credit score. If you are delinquent on multiple accounts, you will appear to be a poor credit candidate. A lender will rightfully be concerned that if you are not paying other debts, that you will also not pay this new debt. A Chapter 13 bankruptcy, on the other hand, will demonstrate to lenders that you have the ability to make payments on all debts and you are making an honest effort to do so. After the completion of a Chapter 13 bankruptcy plan lenders may also view you as less of a risk because some or all of the debt was repaid, rather than liquidated.

Call Us Today to Speak with a Chapter 13 Bankruptcy Lawyer in St. Petersburg

Chapter 13 bankruptcy is a great tool to get your credit back on track. The attorneys at Berkowitz and Myer will advise you on whether filing a Chapter 13 bankruptcy is right for you. To find out whether you are a good candidate for Chapter 13 bankruptcy, call the St. Petersburg firm of Berkowitz & Myer at (727) 344-0123 today for a no cost, no-obligation consultation. You can also send us an email through our online contact form.

Chapter 13 Bankruptcy vs. Debt Relief Companies

If you are in the unfortunate position of finding your debt getting out of hand, you may find yourself considering two entirely different options: bankruptcy and debt settlement. While on the surface debt settlement through a debt relief company may sound great, it is fraught with hidden perils that often remain unknown to consumers until it is too late. For this reason, you should always consult with a St. Petersburg debt relief attorney before engaging a debt relief company to help you manage your debts.

The Promise and Pitfalls of Debt Settlement

There are many companies out there that offer debt settlement. These companies, known as debt relief companies, often operate in a legal gray area. The debt relief companies make big promises, such as settling all of your debt for a fraction of the amount owed. While this seems great on the surface, there is more to it than simply paying and having the debt canceled. The debt relief company will ask you to make payments to it on a regular basis, and then they will use those funds to negotiate a settlement with your creditors and they will keep a portion of it as their fee. The debt relief company may encourage you to fall behind on your payments so that the creditor will consider you for a settlement. This is harmful to your credit score and credit report, as defaults can stay on your credit report for up to seven years. In the end, you may default on your debt and find that the creditor is unwilling to negotiate a settlement with you. Instead, the creditor may seek a court judgment permitting it to garnish your wages or place a lien on your property. Even if the debt relief company is successful in negotiating a settlement, your credit report will still reflect a charge-off or settlement for up to seven years.

A Better Alternative to Debt Settlement

A Chapter 13 bankruptcy is a legal remedy that can help you get your finances back on track. A Chapter 13 bankruptcy plan does not operate as a debt settlement. Instead, it is a repayment plan that allows you to make affordable payments to creditors over a period of three to five years. Common debts that can be included in a Chapter 13 plan include the following:

  • Credit card bills
  • Medical debt
  • Car loans
  • Personal loans
  • Utility bills
  • Past-due rent

This plan is proposed by you and your attorney, and if successful, will allow you to head off your debt before it spirals out of control. You can satisfy your debts without the risk of wage garnishment or property liens. Furthermore, depending on the amount of debt, a Chapter 13 bankruptcy is often a more economical option as all of your debt is taken care of in one go rather than piecemeal. Chapter 13 bankruptcy is also overseen by a court of law, so you can rest assured that attorneys offering Chapter 13 bankruptcy services are well-regulated, which cannot be said about debt relief companies.

Call the St. Petersburg firm of Berkowitz & Myer Today to Discuss Chapter 13 Bankruptcy

A Chapter 13 bankruptcy may very well be a better option for you than debt settlement if you are facing mounting debt. The attorneys at Berkowitz & Myer can advise you on all of your options and can determine whether a Chapter 13 bankruptcy is the right fit for you and your needs. Call the St. Petersburg law firm of Berkowitz & Myer today at (727) 344-0123 or contact us online to speak with an attorney about the solution to your debt.

no-cost consultation: (727) 344-0123