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.

no-cost consultation: (727) 344-0123