When a person is in debt, it is customary to try to stick to a budget or implement a payment plan on one’s own. While this may help some Florida residents overcome debt, others may find they get to a point where they realize the problem is beyond their control. At that point, outside assistance may be needed, so that an individual can learn how Chapter 13 bankruptcy can operate as a debt repayment plan.
Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy will require one to pay back some of the debt owed. The helpful part is that you can propose a repayment plan, lasting up to five years, during which time you can pay what you owe to your creditors. The type of debts that you have determines how much you will have to pay back, and situations can vary greatly based on individual circumstances. The plan you propose will also have to be approved by the U.S. Bankruptcy Court.
Debts are classified as either secured or unsecured. Secured debt is defined as debt that is backed by some type of property, which is most often a car or home. Unsecured debt can include medical bills, most personal loans and credit card debt. Most often, when a payment plan is completed pursuant to Chapter 13, secured debt will be given a repayment priority.
A close look at all of your debt, along with your income, will help a lawyer determine which type of bankruptcy will work for your situation. Long-term goals and financial obligations will be assessed, and an attorney will work with you to ensure that your debt repayment plan is viable and help put the plan in motion. For those in Florida who are unsure about the facts of Chapter 13 bankruptcy and would like more information about how it could benefit their unique situations, our website has more valuable information.