FAQs about Chapter 13 Bankruptcy

Orlando Bankruptcy Attorney | Chapter 13 Bankruptcy: FAQs

Orlando Chapter 13 Bankruptcy FAQs:

• Do I have to hire an attorney?
• Does filing for Chapter 13 bankruptcy stop creditors from collecting a debt?
• How long will my repayment plan last if I decide to file for Chapter 13 Bankruptcy?
• Along with other debt, I owe back taxes to the IRS. Can Chapter 13 bankruptcy help?
• We’re facing foreclosure. If we file for Chapter 13 bankruptcy, can we keep our home?

Orlando Chapter 13 FAQs Overview:

Do I have to hire an attorney?

No, but it is strongly recommended. Most cases without representation by an attorney fail. Neither the bankruptcy trustee nor the Court represents you and neither can give you legal advice.

Does filing for Chapter 13 bankruptcy stop creditors from collecting a debt?

Chapter 13 bankruptcy rules state that a creditor may no longer pursue collection activities when a debtor files for bankruptcy. As soon as debtor files the appropriate paperwork and pays the filing fee, an automatic stay takes effect. An automatic stay prohibits creditors from further attempts to collect a debt. This means that any lawsuit proceedings must cease, a creditor may not report the debt to credit reporting agencies, and the debtor's property and income are safe from seizure. Collection activities may continue for spousal and child support, tax debt, and pension loans, however.

How long will my repayment plan last if I decide to file for Chapter 13 Bankruptcy?

The length of your repayment plan depends on your income level. If your monthly income exceeds the median monthly income for a household of your size in your state, your plan must last five years -- unless you can propose a plan that pays 100% of your unsecured debt in a shorter period of time. If your income is less than the median monthly income for Florida or any other state, you can propose a three-year plan, even if your unsecured creditors cannot be fully repaid during that time.

Along with other debt, I owe back taxes to the IRS. Can Chapter 13 Bankruptcy help?

One advantage of Chapter 13 over Chapter 7 Bankruptcy is the debtor's ability to deal with debt that would not be wiped out in Chapter 7 bankruptcy — including tax debt. (Other debts that cannot be canceled in Chapter 7 bankruptcy include child and spousal support arrears.) Although you must repay 100% of your tax debt (unless it qualifies for discharge because of its age), you may do so over the course of your Chapter 13 repayment plan, which usually lasts from three to five years.

We’re facing foreclosure. If we file for Chapter 13 Bankruptcy, can we keep our home?

Chapter 13 Bankruptcy may be a good option if you're trying to save your home from foreclosure. Chapter 13 bankruptcy lets you pay off a mortgage "arrearage" (late, unpaid payments) over the length of your repayment plan -- usually between three and five years. In order for this to work, you'll need enough income to meet your current mortgage payment at the same time you're paying off the arrearage.Once you file your Chapter 13 bankruptcy petition, the "automatic stay" stops foreclosure proceedings until your repayment plan is approved (or rejected) by the court. If approved, the mortgage lender is then bound by the plan and must accept payments towards the arrearage over the length of your repayment period. If you make all the required payments up to the end of the repayment plan (and keep current on your regular monthly mortgage payments), you'll avoid foreclosure and keep your home.

Call our Orlando/Winter Park bankruptcy Law Firm at 407-647-8833 or contact us at our Orlando office to make an appointment for a free consultation.

BAKER LAW, PL serves the Central Florida and seven-county Orlando area, including the cities of Sanford, Lakeland, Lady Lake, Kissimmee, Maitland, Lake Mary, Oviedo, Winter Garden, Winter Park, Windermere, Lake Nona, Apopka, Mount Dora, Winter Springs, Longwood, North Orlando, South Orlando, East Orlando and West Orlando, Melbourne, Titusville, Cape Canaveral, Daytona Beach and New Smyrna Beach, and the counties of Orange, Seminole, Lake, Polk, Brevard, Volusia and Osceola.