If you have been having financial troubles and have been struggling to pay off your debts, you may have begun to consider filing for bankruptcy. And you are not alone. According to the United States courts, almost 780,000 Americans file for bankruptcy each year.
If you have done a small amount of research about bankruptcy in Florida, you may have decided that Chapter 13 bankruptcy is the right option for you. For many people, Chapter 13 is the best type of bankruptcy, as you do not have to pass a means test to be eligible.
However, before you decide to go ahead and file for Chapter 13 bankruptcy, make sure you speak to a professional Florida Chapter 13 bankruptcy attorney, as they will be able to guide you through the process. With that in mind, let’s take a look at what Chapter 13 bankruptcy is, and how you can file.
Chapter 13 bankruptcy
Filing for Chapter 13 bankruptcy will allow you to adjust your financial affairs so that you can get your finances back in order, without having to sell or liquidate your current assets.
To be eligible for Chapter 13, you will not have to pass a means test, but you are required to have at least one source of income.
Once you have filed for this type of bankruptcy with the help of your attorney, a bankruptcy trustee will be assigned to your case. Once this has happened, you will then have to propose a debt repayment plan, outlining how you plan to deal with and pay off your debts over the next three to five years. If this gets approved, you will then be required to stick to this payment plan and pay off your debts over the allotted time.
Chapter 13 bankruptcy exemptions
Although there are always some drawbacks when it comes to filing for bankruptcy, one big advantage of Chapter 13 bankruptcy is that there are a number of your assets should be exempt from being sold to pay off your debts. Here are some examples:
- Homestead exemptions: according to Miceli Law, A homestead may be fully exempt if it is 160 acres of contiguous land and improvements thereon if located outside -a municipality; or if located within a municipality, 1/2 acre of contiguous land.
- Motor vehicle exemption: Chapter 13 bankruptcy allows you to protect up to $1,000 in motor vehicle equity if you are filing by yourself, or joint filers can claim up to $2,000.
- Personal property exemption: Chapter 13 bankruptcy also allows you to protect up to $1,000 worth of personal property, such as jewelry and clothing.
- Retirement exemption: The Southern Florida bankruptcy court will exempt up to $1,171,650 from your retirement accounts, including 401(k)s and IRAs.
Florida has many generous bankruptcy exemptions on offer. However, you must disclose all of your property in your bankruptcy schedules.
These exemptions will provide you and your family with the financial security you need to support yourself during your repayment plan.
However, if you are uncertain about what is exempt and what is not, make sure you speak to a trusted attorney, as they will be able to help you decide what property is exempt.