Winter Park bankruptcy attorney Eric Lanigan knows there are a lot Chapter 13 bankruptcy myths. That’s why it is wise to consult a bankruptcy attorney when considering filing bankruptcy in Florida.
Chapter 13 is a type of debt relief where debtors set up a payment plan to repay some or all of their debts over the course of three to five years. In order to file for Chapter 13, debtors must make a regular income.A means test will determine if your income is above or below the state median income and will determine the repayment period time span. A Chapter 13 bankruptcy is a fairly straightforward process but it is frequently misunderstood.
Common Chapter 13 Bankruptcy Myths
Myth: the bankruptcy court trustee will determine your reorganization plan
Although a trustee may object to your proposed repayment plan, it’s ultimately up to you to determine a plan to appropriately pay back your creditors. The trustee’s only job is to ensure that you abide by the terms of the bankruptcy agreement.
Your goal is to protect creditors while still following bankruptcy laws that are designed to protect the parties in the bankruptcy process. If the trustee does reject your plan, you can appeal that decision to the court.
Myth: those who pass a means test cannot file for Chapter 13
Passing a means test doesn’t make you ineligible for Chapter 13. Rather, it opens up an alternative form of bankruptcy while keeping Chapter 13 as an available option.
Chapter 7 bankruptcy doesn’t have many of the benefits of Chapter 13. Chapter 13 lets you consolidate debts into a plan and extend some financial obligations.
Myth: you’ll still owe all of your debt after filing for Chapter 13
This is only true if the bankruptcy court determines that your or income is large enough to support 100 percent repayment in three to five years. This is not true for most people who file for Chapter 13.
Schedule a Bankruptcy Consultation with Lanigan and Lanigan
Talk with Winter Park bankruptcy attorneys Eric Lanigan and Roddy Lanigan to clarify your questions with answers that are specific to your case. They will help dispel the myths surrounding bankruptcy and explain the options available to you.