Chapter 13 bankruptcy, unlike Chapter 7, is not a liquidation bankruptcy. With this form of bankruptcy, you repay what you owe over a three-to-five-year timeframe.
With Chapter 7 bankruptcies, your assets may be sold to pay down debts, but your remaining debts are discharged soon after. Your debts may also be discharged in Chapter 13 bankruptcy, but only after you complete the repayment plan.
Many people choose Chapter 13 bankruptcy because they don’t have other options. Chapter 13 is for people who have an income or assets that exceed what is allowed in a Chapter 7 bankruptcy.
Further, with Chapter 13 bankruptcy, you don’t have to give up your assets. Therefore, you can continue to keep your home or vehicle. You could potentially lose them if you file Chapter 7 bankruptcy.
Chapter 13 bankruptcies are for individuals with up to $307,675 in unsecured debts and up to $922,975 in secured debts. That means that even someone who has a high income and high debt ratio can seek this kind of bankruptcy. Typically, Chapter 7 requires a means test, and individuals have little or nothing to their names.
Chapter 13 bankruptcy isn’t right for everyone, but it is one of the many options open to people today. If you are drowning in debt but still have a steady income, it could be a good way to keep your assets and pay them off at the same time.
Reducing your financial stress can help you as you work to rebuild your financial health, which is the goal of any bankruptcy. An experienced Florida bankruptcy attorney can help you.