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Filing for Chapter 13

Florida consumers who wish to file for bankruptcy protection while keeping their assets may qualify for Chapter 13 bankruptcy. Their debts are repaid over a period of up to five years unlike Chapter 7 cases that may be settled within months. Payments are made under a court-approved plan that is overseen by a bankruptcy trustee. Prior to filing, individuals will need to take a credit counseling course that has been approved by the federal government.

Although many debts may be discharged through Chapter 13, some debts may need to be paid in full. For instance, tax debt or alimony payments must be made in full, but a debtor may in som e cases not have to pay anything toward unsecured debts throughout the repayment period. Generally, the trustee will collect the payment and distribute it to creditors. During the repayment period, it may be possible to receive new credit.

However, lenders may charge higher interest rates while trustees may need to approve the new debt. Those who opt for Chapter 13 should understand that it can be difficult to complete the process, and only 22 percent of cases were completed successfully in 2011. If a case is dismissed, debtors may owe retroactive interest and must continue to make payments on their outstanding loan balances. In other cases, it will be converted to a Chapter 7 bankruptcy.

Filing for bankruptcy under Chapter 13 is not for everyone. To begin with, it is appropriate only for those consumers who have a regular source of income. There are a variety of eligibility requirements that an lawyer can outline.

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