Floridians who are in financial trouble and need debt relief may want to consider the benefits of bankruptcy. For those who have property they want to retain, Chapter 13 bankruptcy may be a preferable alternative to a Chapter 7 liquidation. People can keep certain properties because they are making payments every month.

Before pursuing a Chapter 13, there are obligations that should be understood. The court must be given details of the debtor’s income, the creditors, the property they own and their living expenses. In addition, the person must take a credit counseling course, provide the most recent tax return, prove that taxes were filed for the past four years and propose a Chapter 13 repayment plan. There is a filing fee that must be paid.

Under Chapter 13, the creditors must be repaid. The payments will begin within 30 days after the case is filed. They are made to a bankruptcy trustee whose responsibility is to distribute the payments to the creditors. The following is the order of priority for the payments: administrative fees, priority debts such as support and alimony, loans and mortgages, liens, and disposable income for unsecured debt like credit cards and medical expenses. If the debtor does not adhere to the plan, the case can be dismissed.

Chapter 13 is a worthwhile option if the person does not want to surrender a home, a car and other pieces of property. It allows for the repayment of the debt with a plan based on the person’s income and financial abilities. If successful, it will clear the debt in three or five years. With bankruptcy, there are several ways to achieve a better financial standing. Having legal advice may be a key aspect of a successful bankruptcy. A legal consultation may help.