Eligibility for Chapter 13 Reorganization Bankruptcy

Chapter 13 bankruptcy is classified as a reorganization bankruptcy. This is opposed to something like Chapter 7 bankruptcy, which can be classified as a liquidation bankruptcy. In a Chapter 7 bankruptcy you will need to give any non-exempt property that you have in exchange for most of your financial obligations being erased. In contrast to this liquidation process, during a Chapter 13 bankruptcy, you simply will not have to fork over any assets. Instead, you’ll be forced to make a structured repayment schedule that shows how you will will use your wages to repay your debts over time, typically 3 to 5 years.

Before you can think about declaring bankruptcy under Chapter 13 bankruptcy in Florida, you need to have the capacity to show that you are eligible to file for it. Unlike Chapter seven bankruptcy, Chapter 13 bankruptcy uses your earnings to repay creditors for the money you owe. If your income is not high enough, or if it is not regular, then you may not be able to make payments according to the schedule and you will not be eligible for Chapter 13 bankruptcy. When you decided to file for bankruptcy you will need a lawyer, visit https://www.blclawcenter.com/ to get the best lawyer for bankruptcy.

In addition, there are certain debt limits that may keep you from filing for Chapter 13 bankruptcy, suggested by professional advisors (visit their website to get details). As of January, 2010, if you have secured debts that exceed $1,010,650 or unsecured debts of more than $336,900, you aren’t permitted file for Chapter 13 bankruptcy. An unsecured debt is one where your creditor does not have the right to take a specific item of property if the debt is not repaid. Alternatively, a secured debt is one in which a creditor “secures” the loan by your promise that the creditor is permitted to take a particular item of property if the debt is not paid (learn more on the matter from top Ottawa bankruptcy firm specialists).

In order to file for bankruptcy, you will need to first receive credit counseling from one of the agencies that’s been authorized by the United States Trustee’s office. Although you may be charged for their services, these agencies are required to provide free or low cost credit counseling if you can show that you are not able to pay.

In addition to the required credit counseling, you will also have to pay a fee to file your Chapter 13 reorganization bankruptcy. As of April 9, 2006, the filing fee for Chapter 13 bankruptcy is $274.

Perhaps the most important, and most tricky, part of a Chapter 13 bankruptcy will be the repayment plan. These documents will describe, in detail, just how much you will pay to which creditors to pay down your debts (some data should be taken from the loan agreement, which is a standard document – you can do it yourself). Although there is no standardized, official form to be used, many courts have developed their own that may be useful for you in making your repayment plan.

In addition, we recommend you to read what VA home loan calculator is.

If you are struggling with debt in Brandon, Tampa or St. Petersburg, contact the Moon Law Group today to discuss your legal options.