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Chapter 13 bankruptcy offers a way to keep the family residence

Most individuals and married couples in Florida who are struggling with overwhelming debt will likely benefit most from filing a Chapter 7 bankruptcy because it gives swift and permanent relief regarding all unsecured debt such as credit cards and medical bills. However, in special circumstances where a house mortgage or car loans are behind, the home and/or the cars can sometimes be saved by filing a wage earner's payment plan called a Chapter 13. In that kind of bankruptcy, the mortgage or car payment will be paid on time every month and a partial payment will be made monthly to get the arrearages on the loan current.

The filer is allowed to construct a payment plan that extends from three to five years. The payment schedule is set forth in the wage earner's Chapter 13 plan, which will show that all secured accounts will be up-to-date and current by the end of the payment plan. Unsecured bills that have not been fully paid in the Chapter 13 at the end of the plan, are generally discharged and wiped out by law.

There are various qualifications for filing a Chapter 13 just as one must also be qualified under the Bankruptcy Code to file a Chapter 7. When making the choice between the two chapters, and determining one's qualifications for either one, it is best to obtain a consultation with a consumer bankruptcy attorney to go over in detail one's particular financial situation. In general, the Chapter 13 is a wage earner's filing, which means that one must have regular income to file.

The regular income can come from operating one's own business or from regular employment. There are certain benefits that a Chapter 13 offers to the individual or married couple, not the least of which is the possibility of keeping one's home despite being in arrears on the mortgage. Again, these issues are best discussed in consultation with an experienced consumer bankruptcy attorney. If you are a Florida resident, make sure to arrange the consult with an attorney practicing in the state.

Source:, "Bankruptcy Basics: How to File for Chapter 13", Sean Pyles, Nov. 29, 2017

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