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Chapter 13 Bankruptcy Tampa Florida Bankruptcy Attorneys and Lawyers |
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A Chapter 13 Bankruptcy is also called a Debt Reorganization or Debt
Consolidation. In a Chapter 13 Bankruptcy, the Bankruptcy Court also
assigns a Trustee, called a Chapter 13 Bankruptcy Trustee. However, in a
Chapter 13 Bankruptcy, unlike a Chapter 7 Bankruptcy, the Trustee’s role
is very different. In a Chapter 13 Bankruptcy the Debtor is offering to
Consolidate and repay her Debts but with generally reduced Principal and
Interest. The Bankruptcy Laws governing Chapter 13 Bankruptcy DO NOT
permit the Liquidation of Assets like in a Chapter 7 Bankruptcy.
Therefore, the question for the Chapter 13 Trustee then is to determine
a fair repayment of Debt in the interest of both the Debtor and the
Creditor based upon the Debtor’s Income and Assets. The Chapter 13
Bankruptcy Trustee acts as a middleman between the Creditor and the
Debtor and her Attorney, in arranging a fair repayment of that Debt. The Debtor in a Chapter 13 Bankruptcy makes a monthly payment to the Chapter 13 Trustee. The Trustee then pays all the Debtor’s Creditors as those Creditors are determined to be paid by the Debtors Chapter 13 Plan. The monthly payment also includes the Trustee’s fee of approximately five to ten percent of the monthly payment. Chapter 13 Bankruptcy is an efficient device for reorganizing and consolidating debt. Chapter 13 is often used by Debtors to pay not only Credit Card and Medical Bills but also Tax Debts to the Internal Revenue Service. Chapter 13 Bankruptcy can also be used to lower Motor Vehicle Payments and Interest and sometimes can be used to Value the Automobile wherein the Debtor only pays the true Value of the Automobile through the Chapter 13 Plan. A new Bankruptcy Law requires the Debtor in Bankruptcy to own the automobile for 910 days in order to value the automobile. However, even if we cannot value the automobile we can usually lower the interest rate and monthly payment. |
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Chapter 13 Bankruptcy historically has been often used to stop
Foreclosures on Homes or Homesteads. If a Debtor is behind on their
Mortgage payments then the Debtor can file a Chapter 13 Bankruptcy to
stop the Foreclosure and allow the Debtor to catch up the Arrearages or
missed payments over 36 to 60 months. In addition, the Debtor must make
her regular Mortgage payment. Unfortunately, the Bankruptcy Laws do not
allow the Debtor to reduce her Mortgage payments through a Chapter 13
Bankruptcy. However, if a Debtor has a Second Mortgage on her Homestead and that Second Mortgage is Unsecured, meaning the Homesteads Fair Market Value is less than the Balance of the First Mortgage, then the Debtor can often completely eliminate the Second Mortgage through a Chapter 13 Bankruptcy. This process is called Lien Stripping and we have successfully eliminated Second Mortgages for hundreds of our Clients. Although Chapter 13 Bankruptcy is often used to permanently stop Foreclosures, with the recent Real Estate Crisis in Florida, many of our Clients are using Chapter 13 Bankruptcy to temporarily stop the Foreclosure to give themselves additional time to marshal their resources before they eventually have to leave their Homes. By eliminating the Debt owed on the Mortgage and consolidating their remaining Debts in a reduced monthly payment, our Clients can be given an opportunity to correct their Finances and save money for their security or towards the purchase of a Homestead in the future. Chapter 13 Bankruptcy is on your credit report for 10 years but with some effort you can re-establish your credit in 2-3 years. If you are interested in re-establishing your credit you may consider our Credit Repair Program. |
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A Chapter 13 Bankruptcy allows most Debtors to reduce the principal on
the Debt owed on a car if the car was bought at least 910 days before
filing Bankruptcy. If the Debtor meets all the requirements, the amount
owed on the car can be reduced from what is currently owed on the car,
to the current fair market value. In most cases this gives substantial
financial relief to the Debtor as the monthly payments can be
drastically reduced. Also, in most cases the interest rate is
substantially lowered as well. For those looking for help with their mortgage, a Chapter 13 Bankruptcy filing can be very helpful in trying to negotiate with the mortgage holder. A Debtor can always stop Foreclosure and try to keep their home by filing Chapter 13 Bankruptcy and paying the mortgage and arrears through the Bankruptcy plan. However, surrendering, or giving up the house through a Chapter 13 can also help in an attempt to modify a mortgage. If you surrender the house through a Chapter 13, you are no longer liable for the debt when the Chapter 13 is concluded. This gives the homeowner a little extra leverage against the mortgage company to negotiate as the surrender of the home leaves them with foreclosure as almost their only option. Reorganizing your debt through a Chapter 13 Bankruptcy can also be helpful in reducing or even eliminating your IRS debt. The treatment of your Debt through a Chapter 13 Bankruptcy depends on several factors that include, but are not limited to, when the taxes were due, when they were last assessed, and when you filed your taxes. |
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 Once a Chapter 13 Bankruptcy has been filed confirmation hearings will be set. Confirmation hearings are meetings held in Federal Bankruptcy Court, where the trustee, the Debtor’s attorney, any creditor’s attorney, and the judge discuss whether the proposed plan submitted by the Debtor is acceptable. The Debtor himself usually does not have to be present at these hearings. Everyone present gets to voice their concern and discuss how the Bankruptcy Laws affect the Debtors plan. If all parties are satisfied, then the Plan is confirmed, or approved by the Bankruptcy Court. A confirmation order, signed by the judge, will be sent out to the Debtor so that the Debtor can see in writing exactly what their plan payments are and for how long they will be. |
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