How To File Chapter 13 Bankruptcy In Florida

If you are experiencing financial hardship, Chapter 13 bankruptcy may provide some much-needed relief. Chapter 13 is when a borrower consolidates their existing debts into one monthly payment. Unlike Chapter 7 bankruptcy, borrowers will not be required to sell their assets as a condition of the bankruptcy. Instead, Chapter 13 is considered a restructuring bankruptcy because the borrower continues to make payments according to a court-approved payment plan.

With Chapter 13 bankruptcy, you can lower payments, prevent foreclosure, eliminate debt, and stop car repossession. Chapter 13 is designed to help borrowers keep their assets and eliminate debt for a fresh start. There are many advantages to Chapter 13, but there may be some disadvantages as well. Therefore, you should consult with a Tampa bankruptcy law firm before filing.

Stop Foreclosures, Garnishments, and Lawsuits

When a borrower files for bankruptcy, an automatic stay is issued. The stay goes into effect immediately after a Chapter 13 bankruptcy is filed. The automatic stay will put an immediate end to all collection activities. Therefore, all foreclosures, garnishments, lawsuits, and phone calls will stop. The automatic stay will even cancel a foreclosure sale that has already been scheduled. For more information on the automatic stay, click here.

Mortgage Modification with Chapter 13 Bankruptcy

Chapter 13 allows homeowners to force the bank to accept a 5-year payment plan for the past due amount. The homeowner won’t have to pay the full mortgage in 5 years, only the amount that is past due. You don’t need to apply for a loan modification, and you can force the bank into the 5-year payment plan.

Additionally, you can apply for a traditional loan modification as part of the Chapter 13 case. These modification applications are usually much different than when a homeowner applies. In Chapter 13 mortgage modifications, the U.S. Trustee will oversee the application. Additionally, there can be a mediator appointed as well to help streamline the process. With much more oversight, the bank is less likely to cause unnecessary delays and wrongfully deny legitimate requests.

Requirements to File Chapter 13 Bankruptcy

Only individuals who are domiciled in the United States may qualify for Chapter 13. Therefore, businesses and corporations are not eligible. Further, there are income requirements to file Chapter 13 bankruptcy as well. To qualify for Chapter 13, you must receive a regular source of income. The borrower needs to prove they have a regular and stable income, which is sufficient to pay the proposed payment plan. See 11 U.S.C. 109.

In a jointly filed 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. See In re Hanlin

Debt Limits for Chapter 13

There are 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 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 allowed changes frequently. For information on future changes, click here.

Credit Counseling Requirements to File Chapter 13

Borrowers must also attend two credit counseling courses as requirements for Chapter 13. 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 court. Additionally, a second class may be required after your case has been filed.

Chapter 13 Payment Plan

In a Chapter 13 bankruptcy, the borrower’s goal is to obtain court approval of their proposed payment plan. Borrowers will push for payment plans that pay creditors as little as possible. On the other hand, creditors will be seeking as much money as they can. Therefore, it is essential to hire an experienced bankruptcy law firm in Tampa to protect your rights. Creditors will likely have attorneys, and it can be challenging to battle them without an attorney on your side.

When to File the Chapter 13 Bankruptcy Payment Plan

The payment plan must be filed within 14 days of filing the case. Borrowers should seek the aid of an attorney when submitting the Chapter 13 payment plan. An unsatisfactory payment plan can cause delays and unwanted consequences. The borrower must classify all debts and provide for payment of the indebtedness per bankruptcy law. Once the court confirms the payment plan, it will bind both the borrower and creditors.

What Should be Included in the Bankruptcy Payment Plan

The payment plan should outline how the income the borrower receives will be used to pay the debts owed. The allocation of payments must be feasible for both the debtor and creditor. The plan must provide for secured claims to be paid the present value of the collateral it secures. However, exceptions can be made if the creditor agrees to accept a lower amount or the debtor surrenders the property.  On the other hand, unsecured claims only receive as much as they would have received if the debtor filed for Chapter 7.

Under Chapter 13 bankruptcy law, not all unsecured claims are treated the same. For instance, the Chapter 13 bankruptcy payment plan must provide for full payment of all unsecured priority claims. Examples of priority unsecured claims include but are not limited to the following:

  • Domestic support obligations – ex. Alimony, child support, etc.
  • Administrative expenses of the bankruptcy
  • Employee wages and benefits

How Long Chapter 13 Payments Last

The Chapter 13 repayment plan can last anywhere from three-to-five years.  If your income is less than the state average income, then you will be in a three-year repayment plan. However, it can be extended up to 5 years if you cannot afford three-year monthly payments.  See Bankruptcy Law 11 U.S.C. §§ 1322.  Extending to a five-year plan would not necessarily result in you paying more money to your creditors. Often, the five-year plan just stretches out the payments to make the monthly amount less.

If your income is more than the state average income, you must be in a five-year repayment plan. A bankruptcy lawyer can provide more information on which type of payment plan may be required in your case.

Creditors Rights in Chapter 13

Creditors will likely have attorneys fighting for as much money as possible. For instance, creditors have the right to object to a borrower’s proposed payment plan. However, if the plan allocates funds in accordance with bankruptcy law, the judge must approve it, despite the creditor’s objections. Your bankruptcy lawyer should be well versed in overcoming creditors’ objections, and it is a common practice in Chapter 13 cases.

Approval of a Chapter 13 Payment Plan

If the borrower makes all the payments and satisfies the other requirements, they will be entitled to a discharge. The discharge is a permanent court order releasing the borrower from personal liability on the debt. Further, the discharge prohibits a creditor from taking any collection action against the borrower. In most cases, obtaining a discharge will be the primary reason why a borrower files for bankruptcy. However, there are many nuances of bankruptcy law that can prevent a discharge of certain debts. Therefore, it is vital to seek the aid of an experienced Chapter 13 law firm.

Waiting Periods to Refile Chapter 13 Bankruptcy

If you previously filed Chapter 7, you must wait four years from the date you received your discharge before you can file Chapter 13.  See Bankruptcy law 11 U.S.C. § 1328.  If you previously filed Chapter 13, you must wait two years from the discharge for eligibility to refile Chapter 13.

If you previously filed Chapter 13 and now want to file Chapter 7, you must wait six years from the commencement date of your previous case.  See Bankruptcy Law 11.U.S.C. §727  The “Commencement Date” is the day you filed your bankruptcy petition with the court.

Bankruptcy Law Firm in Tampa

Bankruptcy law can be very confusing, especially when it involves a Chapter 13 bankruptcy payment plan. If you are considering bankruptcy, you contact an experienced Tampa bankruptcy lawyer at Florida Law Advisers, P.A.  We are a customer-service oriented firm with a strong reputation for providing personalized attention and dedicated legal counsel. For a free, confidential initial consultation, call us today at 800 990 7763.

How To Eliminate Medical Bills With Bankruptcy In Florida

The coronavirus (COVID-19) has had a devastating impact on the lives of countless Americans.  Many have fallen ill, and others have become unemployed and are struggling to make end’s meat. Whether the impact has been to your income or the expense of supplies needed to prepare for this emergency, the unexpected tragedy has caused great financial hardship. Fortunately, there are many different options for relief from debt due to coronavirus. To see which option may be best for your specific circumstances, contact a Tampa bankruptcy lawyer for a free consultation.

COVID-19 Stimulus Check

Congress recently passed the CARES Act, which may provide individuals with a $1,200 stimulus check. For joint filings, the coronavirus stimulus check would be $2,400. Plus, recipients may receive an additional $500 for each minor child. The money is certainly needed but it may not be enough to solve the bigger, more pressing financial problems. If you have a lot of debt or falling behind on payments $1,200 – $2,400 is only a temporary band-aid. In some cases, the most effective use of the money may be to file bankruptcy.

Bankruptcy can be used to eliminate debt, stop a foreclosure or repossession, and harassing calls from your creditors. There are two types of bankruptcy that borrowers can file, Chapter 7 and Chapter 13. A bankruptcy law firm can explain the differences and advise which type of bankruptcy may be best for your situation.

Chapter 7 Bankruptcy for COVID-19

Chapter 7 bankruptcy is the fastest type of bankruptcy and is designed to give borrowers a fresh start. As soon as the case is filed an automatic stay will be enacted. The stay will immediately end all collection activity, including foreclosure sales, garnishments, and car repos. Additionally, you can discharge debt in Chapter 7 without having to pay anything to the banks. The discharge is a court order that releases the borrower from all personal liability.

Chapter 13 Bankruptcy for COVID-19

Chapter 13 is the other type of bankruptcy used by borrowers. This type of case is often recommended for people trying to save property such as their home or car. As long as you have the property in your possession, you will be protected by the automatic stay. See 11 USC 362. These protections happen automatically once your bankruptcy case is filed. If you fell behind on mortgage payments, instead of making a partial payment that the lender may not even accept, you can file Chapter 13 and force your lender into a five year repayment plan. You may even be able to use the court’s modification program to modify the terms of your mortgage.

COVID-19 Car Repossession

You can use a Chapter 13 Bankruptcy to save your car even if your lender has a repossession out. As long as you still have your car when you file a Chapter 13, the car will be protected. As part of Chapter 13, you can force your lender into a five-year repayment plan. Additionally, the interest rate may even be lower than what you are currently paying the bank. The payment plan in the bankruptcy is based on the federal bankruptcy code Title 11, which means that you don’t need the bank’s permission.

On the other hand, if your car was already repossessed or if you can simply no longer afford your car, Chapter 7 Bankruptcy can ensure the loan doesn’t haunt you in the future. When a car is repossessed or even voluntarily surrendered your lender will auction the vehicle. If they are not paid in full for your loan you will be sent a bill for the remaining amount. The amount will include the balance plus interest, late fees, and legal fees. However, if you discharge the loan in Chapter 7 bankruptcy you will have no have personal liability for the car debt. Therefore, the bank would be prohibited from taking any collection action against you.

Late Credit Card Payments Because of COVID-19

For most people, the difference between credit card debt because of corona virus (emergency supplies, living expenses, unemployment) and normal credit card use is plain to see. There is a global pandemic and with so many jobs impacted people are incurring a lot of credit card debt because of coronavirus. Unfortunately, credit card companies don’t view these types of debt differently. Regardless, whether the debt was for necessary supplies or vacations, lenders will usually take measures to collect the debt, such as:

  1. Place the account in collections
  2. Harass borrowers with countless bills and phone calls.
  3. File lawsuits

If a credit card company is successful in suing you they will receive a judgment. At this point, the company suing you is likely a debt buyer and not the credit card company that you originally owed. The judgment holder will likely be charging interest and their legal fees as they pursue collection. In many cases, the interest and legal fees will be more than the original loan amount. However, a Chapter 7 bankruptcy can eliminate the judgment, including the interest and legal fees. See Florida Statute 55.145.

Medical Bills from Coronavirus

All medical bills from coronavirus should qualify for discharge in bankruptcy. See 11 USC 524. The discharge is a permanent court order releasing your personal liability on the debt. Further, the discharge prohibits a creditor from taking any collection action. In many cases, obtaining a discharge for hospital bills will be the main reason for filing bankruptcy. However, not all debts will be eligible for a discharge in bankruptcy. Therefore, if you are considering filing for bankruptcy you should speak with a bankruptcy attorney in Tampa before taking any legal action.

Consult a Bankruptcy Law Firm in Tampa

At Florida Law Advisers, P.A. we understand that these are difficult times. Too many Americans are getting ill, losing their job, and falling behind on bills. If you are struggling with debt we may be able to help. Regardless, whether you need help with Chapter 13, Chapter 7, or other forms of debt relief we provide the competent legal advice you can trust. Call us now at 800 990 7763 to speak with a Tampa bankruptcy attorney at our firm.

How To Stop Car Repossession In Florida

Repossession of a vehicle is an unfortunate situation too many people suffer.  If a borrower fails to make timely payments for a car loan the lender may begin the repossession process. See Florida Statute 537.012. For many, cars are essential for getting to and from work, school and repossession can have devastating consequences. Moreover, missed payments can lead to the bank initiating repossession without even providing notice to the borrower.

Fortunately, there are options and rights for borrowers to stop car repossessions in Florida. If you received threats of repossession, contact a bankruptcy attorney for legal advice without delay. An experienced Tampa bankruptcy attorney may be able to prevent the car from being repossessed and eliminate late fees and penalties.

How to Stop a Car Repossession Quickly

If you have defaulted on a car loan, the lender usually can have the car repossessed without notifying the owner. See Florida repossession laws. Borrowers at risk of a car repo need help right away. For many borrowers facing a car repo, the automatic stay protection is the answer. The automatic stay forces creditors to stop all collections attempts against you. As soon as the bankruptcy is filed an automatic stay instantly goes into effect. Under the stay, creditors cannot call you, continue with a lawsuit, repossess, or foreclose on your property. Regardless, how many months late payments are or how high the outstanding balance is, a repossession will be stopped

In car repo cases, timing is everything. If you may soon default on a car loan, it’s important to speak with a Tampa bankruptcy lawyer before your car is repossessed. If you wait too long the automatic stay may not be able to help. The automatic stay only prevents the bank from taking the car, it will not force them to return a car they already had before the case being filed.

Stop a Car Repossession with Bankruptcy

The automatic stay will stop all collection activity as soon as the bankruptcy is filed, but it is not intended to be a long-term solution. Borrowers will need to consider whether they should file for Chapter 7 or Chapter 13. Each form of bankruptcy will have its unique benefits and disadvantages. The type of bankruptcy you choose will greatly impact your ability to keep the car or discharge the balance owed. If you think bankruptcy may be a solution, schedule a consultation with a bankruptcy attorney to learn more.

Payment Plan to Stop Car Repossession

Chapter 13 is the most common option for borrowers seeking to stop car repossession.  Chapter 13 provides car owners with up to 5 years to pay off the car loan. In many cases, 5 years is enough time for the owner to catch up on the payments. Additionally, by spreading the payments over a new 60-month loan it helps reduce monthly payments. A 60-month loan is a vital tool that borrowers can use to permanently stop the car repo and make the loan affordable.  Most of the time, the interest rate applied is around 6%.  In some cases, this will allow borrowers to save money on interest as well.

How to Wipe Out Car Loan

If you do not want to keep the car, you can surrender the vehicle and discharge the debt. Simply walking away from the automobile is not a good solution. The balance will often be thousands of dollars more due to legal fees, interest, and late penalties. If the car repo auction does not provide enough money to pay the full loan, the bank can garnish wages and place liens on your property for the remaining balance.

On the other hand, if a debt is discharged in bankruptcy the borrower will be released from all personal liability on the debt. See bankruptcy law 11 U.S.C § 727. Further, the discharge prohibits a creditor from taking any collection action against the borrower. Bankruptcy is designed to give borrowers a fresh start, not be burdened with debt from cars they no longer own.

Lien Strip a Car in Chapter 13 (Cram Down)

A cramdown in bankruptcy will allow you to keep the car and shave thousands of dollars off the loan. With a cramdown, the borrower keeps the car and will only owe the car’s market value, not the loan balance. Thus, if your loan exceeds the car’s value you may get a windfall and save thousands of dollars. For instance, if your car is worth $5,000 but you owe $9,000, you would save $4,000 (9,000 – 5,000) and get to keep the car! To be eligible, the borrower must have purchased the car at least 910 days (roughly 2.5 years) before the filing date of the Chapter 13 bankruptcy petition. See bankruptcy law 11 US 1325.

How to Lien Strip a Car in Chapter 7

Chapter 7 has traditionally been the option for surrendering a car in jeopardy of repossession. However, section 11 U.S.C. 722 of the bankruptcy code allows what is called a “redeeming” of the car- essentially, a new loan that pays just the value of the vehicle (like the cram down in Chapter 13), rather than the outstanding loan balance. Moreover, in Chapter 7 there is no  910 rule, so you won’t need to wait 2.5 years to use this option. For instance, if you only owned the vehicle for one year, you may still be eligible for reducing the car loan.

Consult a Tampa Bankruptcy Law Firm

If you are at risk of losing your vehicle to repossession contact Florida Law Advisers to speak with a bankruptcy lawyer.  We are a customer service-oriented bankruptcy law firm committed to providing personalized attention and dedicated legal counsel. All of our initial consultations are free and convenient payment plans are available. To speak with a bankruptcy lawyer in Tampa now or schedule a free consultation call us today at 800 990 7763.

Florida Bankruptcy Law: What Is An Automatic Stay? Stop Creditor Harassment

The automatic stay in Chapter 7 and Chapter 13 bankruptcy is one of the most important tools available to borrowers. The automatic stay requires all collection activity against borrowers to stop immediately after a case has been filed. Creditors and collection agencies will not be able to pursue any collection actions when the stay is in effect. The automatic stay even stops garnishments and foreclosure auctions already scheduled to occur. For more information about the automatic stay or bankruptcy contact a Tampa bankruptcy attorney to schedule a consultation.

How Long Does the Automatic Stay Last?

In most cases, the automatic stay will remain in effect until your bankruptcy case is discharged. The automatic stay is available under both Chapter 7 and Chapter 13 bankruptcy. Typically, the stay is automatically lifted for all creditors once your case is closed. See bankruptcy case  Failla v. Citibank.

If a secured creditor wants to move forward with collection efforts after the stay has been enacted, the creditor must first seek approval from the bankruptcy court. This process will require notice to you (the debtor) and a court hearing. See U.S. Supreme Court Case: Citizens Bank of Maryland v. Strumpf. The automatic stay will prevent creditor harassment until it is lifted by a judge. If the judge grants the secured creditor the ability to move forward with their collection after the hearing, the automatic stay is considered to be “lifted” and collection efforts may resume.

Phone Calls & Notices From Creditors

Based on the legal tradition that parties represented by a lawyer cannot be contacted directly by the opposing party, the automatic stay ensures that only a judge can lift the automatic stay. Thus, the entire time a legitimate bankruptcy proceeding is going on, your creditors can no longer call, send you bills or notices, or otherwise contact you regarding the debt. Further, the automatic stay should remain in effect throughout the case. Only if a creditor obtains relief from the stay by a judge can collection actions resume during an active Chapter 7 or Chapter 13 bankruptcy.

Can a Bankruptcy Stop a Foreclosure Sale?

If there is an active foreclosure, the automatic stay will freeze the foreclosure as soon as the bankruptcy is filed. As long as the bankruptcy case is filed before the foreclosure action, the automatic stay will cancel the sale. Even if you file five minutes before the scheduled auction the foreclosure will be canceled.

It is important to make sure that once you file your bankruptcy petition to stop the foreclosure that you also file a “Suggestion of Bankruptcy” in the foreclosure lawsuit right away. This assures that the state court judge is on notice of your bankruptcy, so the foreclosure can be stopped on time. The Tampa bankruptcy law firm you hired should file the suggestion of bankruptcy in your foreclosure case on your behalf.

Will Bankruptcy Stop a Car Repossession?

The automatic stay is a common solution for borrowers seeking to stop car repossession in Florida. The automatic stay forces creditors to cease all collections attempts, include car repossessions. In this situation, timing is everything. If you expect to soon default on a car loan and need help with stopping repossession in Florida, it Is important to speak with a Tampa bankruptcy lawyer before your car is repossessed. Waiting too long to get started on the automatic stay may decrease the chances it can help. If the creditor obtains possession of the car before the bankruptcy is filed the automatic stay will not help to get the car back, it only prevents a creditor from taking the car.

What is the Quickest Way to Stop a Wage Garnishment?

The automatic stay is often the quickest way to stop a wage garnishment. Unlike the head of household exemption, you do not have to wait weeks or months to stop the garnishment. Instead, the garnishment must be stopped as soon as the bankruptcy case is filed. Conversely, the head of household process requires borrowers to wait for a court hearing in which a judge orders the garnishment to be stopped.

Automatic Stay Exceptions

The automatic stay does not apply to all types of debts and collection activities. A list of some of these automatic stay exceptions is below, for a more complete list see bankruptcy  11 USC §362 or contact a Tampa bankruptcy lawyer.

  1. Family support obligations: Many different forms of family support obligations will qualify for an automatic stay exception. For instance, child support payments and child custody cases are all exempt from the stay.
  2. Criminal court cases: The automatic stay will not delay or cancel the beginning or continuation of a criminal case. Bankruptcy is intended to address a debtor’s financial distress, not criminal activity. However, if the criminal prosecution is primarily based on debt collection the automatic stay may be placed on the criminal case. For instance, if the criminal prosecution is based on the debtor writing a bad check the bankruptcy stay may be enforced in the criminal case. See In Re Dovell.
  3. Tax bills: Demands for tax returns, and payment of taxes are eligible for an automatic stay exception. However, tax liens that would attach to the property of the bankruptcy estate will not take effect unless the debt is ineligible for a discharge and the property is transferred out of the estate or revested in the debtor.
  4. License suspension: The automatic stay will not prevent the debtor from attempting to reinstate a driver’s license that was suspended for reasons related to debt collection. However, license suspensions related to criminal proceedings will not be stayed subject to the automatic stay. See In Re Games.

How to Avoid an Automatic Stay Exception

Even though a debt is listed in the statute as being eligible for an automatic stay exception, the debtor may still be able to convince a court to pause the collection action and enact a stay. Bankruptcy courts are courts of equity. Therefore, the judge should consider the fairness of the relief sought, as opposed to just the strict rules of law.  Further, under Bankruptcy law 11 USC 105, the judge has the authority to issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of the law. The overriding principle behind bankruptcy is to give debtors a fresh start.  In some cases, an automatic stay exception can frustrate the purpose of debtors achieving a fresh start.

Questions? Contact a Tampa Bankruptcy Law Firm Today!

At Florida Law Advisers, P.A., the Tampa bankruptcy attorneys have years of experience helping people solve their financial problems. We understand that these are very difficult times and we are here to help. We have many options available that can help you successfully manage your debt and regain your financial health. The right course of action will depend on the unique circumstances of your case. To see which options may be available, contact us to schedule a free consultation with a Tampa bankruptcy lawyer.