Florida residents who have found themselves under a massive load of debt with no way out may consider bankruptcy. While this type of financial move should never be taken lightly, it can be a necessity for some people. There are many different types of bankruptcies out there for both consumers and businesses to choose from. In this article, you’re going to learn about Chapter 13 bankruptcy.
What is Chapter 13 bankruptcy?
Chapter 13 bankruptcy is a type of U.S. bankruptcy that involves the reorganization of a person’s finances. This reorganization happens under the supervision of the court. Contrary to what most people think, this type of bankruptcy does not involve selling off any of your assets. Rather, you work with the court to come up with a viable repayment plan to repay all of your creditors over a period of three to five years.
No direct contact with creditors
With Chapter 13 bankruptcy, the debtor does not actually have any contact with their creditors. Rather, the debtor makes a list of all of their debts and a list of all of their income and assets. They’ll work with a bankruptcy trustee and come up with an agreeable payment plan. The debtor will pay one monthly payment to the bankruptcy trustee. The trustee will, in turn, distribute that money to the various creditors. This type of bankruptcy allows the debtor time to re-establish payment plans with all of their creditors and avoid any legal actions against them.
Filing for Chapter 13 bankruptcy may be a great option if you’re having trouble with your finances. Before you decide to file for bankruptcy, it’s a good idea to understand what it entails. When you’re going through the bankruptcy process, it’s a good idea to consult an attorney just to ensure that your best interests are looked after.