For people who are considering filing for bankruptcy, learning all they can about the process is one of the things they usually do before making the final decision. If you are considering filing for Chapter 13 bankruptcy, you should make sure that you understand your responsibilities before filing for the protection in Florida.
Why would I file Chapter 13 bankruptcy?
Chapter 13 bankruptcy is a form of bankruptcy protection that allows the filer to keep some of their assets while making payments toward their debts. This is the type of bankruptcy that someone would file if they don’t qualify for Chapter 7 or Chapter 11 bankruptcy.
What do I have to do?
You first have to file for the Chapter 13 bankruptcy. You will then have to pay all associated filing fees for the bankruptcy and be required to submit a repayment plan that enables you to repay your creditors. You will also have to go through a credit counseling program.
How long do I have to repay my debts?
You will either be placed on a three-year or five-year plan. The length of time you have to repay your debts depends on how your income compares to the state’s median income.
What do I do during the repayment period?
During the repayment period, you have to make sure that you stay current on your payments. You can’t incur any new debt without getting the permission of the bankruptcy trustee. You must also keep up with your taxes. You might have to file an expense and income report each year that you are on the repayment plan.
Filing for bankruptcy is something that should be done only when you have learned about the various options and what they entail. Because each situation is different, learning how to employ the applicable bankruptcy codes to your case is vital to ensure you know you are making an informed decision.
Source: FindLaw, “What are a Debtor’s Obligations under Chapter 13?” Sep. 07, 2014