If you are experiencing financial hardship Chapter 13 bankruptcy may provide some much-needed relief. Chapter 13 when a borrower consolidates their existing debts into one monthly bill that is paid to a bankruptcy trustee. Unlike Chapter 7 bankruptcy, borrowers will not be required to sell their assets as a condition of the bankruptcy. Rather, Chapter 13 is considered a restructuring bankruptcy because the debtor continues to make payments to their creditors according to a court approved payment plan. However, there are a few requirements to file Chapter 13 bankruptcy which must be satisfied.
Requirements to File Chapter 13 Bankruptcy
Not everyone is eligible for Chapter 13. There are numerous requirements to file Chapter 13, which must be met in order to be eligible. See 11 U.S.C. 109. Therefore, if you are considering filing for bankruptcy it is highly recommended that you meet with a bankruptcy attorney to determine your eligibility before taking any legal action. A bankruptcy lawyer in Tampa can help explain the legal requirements and prepare you for a successful Chapter 13.
Requirements for Filing in Florida
Only individuals who are domiciled in the United States may qualify for Chapter 13, businesses and corporations are not eligible. Further, there are income requirements to file Chapter 13 bankruptcy as well. To be eligible for Chapter 13, you must receive a regular source of income. The debtor will need to prove the he/ she will have regular and stable income, which is sufficient to pay living expenses and the amounts required under the payment plan. In a jointly filed bankruptcy case, both spouses are eligible even if only one of the debtors receive regular income. A bankruptcy court will focus primarily on the existence and stability of the regular income, rather than the source of the income. See In re Baird. For instance, regular income derived from social security, alimony, pensions, and retirement plans may all be eligible sources of income. See In re Hanlin & In re Varian.
Debt Requirements for Chapter 13
There are also debt requirements to file Chapter 13 bankruptcy in Florida. Unsecured debts must be less than $394,725 and secured debts must be less than $1,184,200. Secured debts are loans that have collateral, such as a car loans and mortgages. On the other hand, unsecured debts have no collateral. Examples of unsecured debts are medical bills and credit cards. The amount of debt a bankruptcy petitioner is eligible to have changes frequently, for information on future changes to the debt ceiling click here.
Credit Counseling Requirements to File Chapter 13
Debtors must also attend two credit counseling courses as requirements to file Chapter 13 bankruptcy in Florida. The first course must be completed within the 180 days immediately preceding the bankruptcy filing. The briefing can be done on an individual basis or conducted in a group setting. Moreover, the briefing can take place by telephone, internet, in person, or even in your attorney’s office with your bankruptcy lawyer present. Once the course is complete the debtor will need to file a statement of compliance with the bankruptcy court. The statement should include either a certificate and debt repayment plan or a statement that the debtor received the briefing but does not have a certificate. Additionally, a second class may be required after your case has been filed.
Bankruptcy Law Firm in Tampa
We understand that filing for bankruptcy can be a very confusing and intimidating process. That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you get an experienced bankruptcy attorney in Tampa by your side throughout every phase of the bankruptcy process. We will help ensure your rights are protected, keep you well-informed every step of the way, and help you receive the utmost protection bankruptcy can offer. To schedule a free consultation with a Tampa bankruptcy lawyer at our firm call, email, or fill out an online inquiry on our website today.