When people think about bankruptcy, they may automatically conjure up images of seeing all of their assets sold, or liquidated, in order to pay back creditors. This typically describes the process of filing for Chapter 7 bankruptcy. For those in Florida who don’t qualify for this form of bankruptcy, Chapter 13 bankruptcy may be the best option.
Chapter 13 bankruptcy is essentially a repayment plan for struggling residents. It is ideal for those who have found themselves behind in payments — such as a mortgage or credit card payments — yet know that, if they had more time, they would be able to catch up. With Chapter 13 bankruptcy, a repayment plan is set up for an average time period of three to five years, and the filer gets to keep a number of assets.
Chapter 13 bankruptcy means that you will have to pay back a percentage of unsecured debt but typically not the entire amount of the debt. Certain debts can’t be discharged at all, such as certain types of back taxes. However, this form of bankruptcy will allow for repayment of back due mortgage over time and can help a homeowner avoid home foreclosure.
Each type of bankruptcy has its pros and cons, dependent on the unique situation of the filer. It is important to understand the differences between the different types of bankruptcy in order to be sure which type might be the most beneficial for you or your family overall. Our firm’s website has an outline of how Chapter 13 bankruptcy works and how it might help struggling Florida residents.