Chapter 13 Bankruptcy Basics

At Ford & Semach, P.A., our attorneys know that handling unmanageable debt is stressful. Once you explore your options, you must decide on a clear path forward. For many individuals and entrepreneurs, Chapter 13 bankruptcy provides the ideal framework for structured debt reorganization.

Commonly called a “wage earner’s plan,” Chapter 13 allows you to repay a portion of what you owe over a three- to five-year period. To qualify, you must show a consistent source of income capable of maintaining regular living expenses while fulfilling your court-ordered payments.

The Bankruptcy Code enforces strict debt limits for Chapter 13 eligibility. For cases filed in 2026, your unsecured debts must total less than $526,700, and your secured debts must total less than $1,580,125. Because these figures adjust periodically for inflation, verifying your liabilities with an attorney is a necessary first step.

Beyond financial thresholds, the law requires filers to complete two educational courses. You must receive credit counseling from an approved agency within 180 days before filing your petition. Before the court grants a formal discharge of your remaining debt, you must also complete a debtor education course designed to help you maintain long-term financial stability.

Throughout your repayment plan, you will make consolidated monthly payments to a bankruptcy trustee. Filing your petition instantly grants you the protection of an automatic stay, which legally stops creditors from contacting you, pursuing collections or continuing foreclosure actions.

Contact our firm today by calling 813-302-1258 to speak with one of our experienced attorneys about your obligations before moving forward.

Chapter 13 Bankruptcy Can Help Protect Your Assets

Chapter 13 bankruptcy can be a good option for individuals who do not qualify for Chapter 7 or have equity and assets to protect. In Chapter 13, you keep your assets. Chapter 13 bankruptcy can be a good option for individuals, including high-asset and high-income professionals, who do not qualify for Chapter 7 or have significant equity and assets to protect.

While both Chapters 7 and 13 look to assist the debtor with their expenses, Chapter 13 is based around reorganization and restructuring instead of liquidation. It is used by those who hold a job or have another form of consistent income. Through this type of bankruptcy, debts are consolidated and payments are made toward this total sum each month. The window of time will generally be around three to five years. After this time period has ended, the dischargeable debt will then be discharged.

At Ford & Semach, P.A., we work with clients throughout the state of Florida to obtain the debt relief they need through Chapter 13 bankruptcy. We understand how upsetting it can be to face financial hardship. We will walk you through the entire process “with dignity” and be there with you through the end.

Reasons Why People Choose Chapter 13 Bankruptcy Over Chapter 7

You can’t qualify for Chapter 7 proceedings if your income is over the median state income and you have enough disposable income to make monthly payments in a repayment plan. If your payments will make a significant enough dent in the debt you owe, you probably will not qualify for the Chapter 7 process.

What Are The Advantages Of A Chapter 13 Bankruptcy?

If you don’t pass the means test for a Chapter 7 bankruptcy, you can seek a Chapter 13 bankruptcy. Some of the advantages of a Chapter 13 bankruptcy include the following:

• You will receive an automatic stay from harassing creditor calls. Those calls won’t return either because you will set up a payment plan for your debt.
• You may renegotiate how much you owe with creditors for credit card debt, medical debt, past utility bills and personal loans.
• You can avoid foreclosure on your home by potentially restructuring your mortgage and catching up on any late payments during your three-to-five-year payback period.
• You can get rid of tax debts through a Chapter 13 repayment plan.
• You can avoid having your vehicle repossessed by potentially spreading out payments for it over a longer period of time.
• A Chapter 13 bankruptcy generally only stays on your credit report for seven years. Plus, creditors can view a Chapter 13 bankruptcy more favorably because you did pay back your debt.
• You may be able to protect someone who cosigned a loan with you, so creditors can’t pursue a cosigner for delinquent payments on the loan.

These interconnected advantages ensure that you can regain control of your financial future without sacrificing the assets you have worked hard to build.

What Are The Downsides Of Filing For Chapter 13 Bankruptcy?

Any bankruptcy filing is no walk in the park. It means that certain luxuries will need to be sacrificed, and debts will need to be paid over a three- to five-year period. In addition, you will lose access to credit cards and your credit record will be damaged. Filing for Chapter 13 bankruptcy means making sacrifices; however, many people believe that these sacrifices are worth it in order to be able to live a debt-free life.

Paying Off Your Debts Through A Monthly Payment Plan

When filing for Chapter 13 bankruptcy, a means test will be conducted. This means test will determine the amount of funds you will have in order to be able to pay off your debts. If you do not have enough funds and fail the means test as a result, you may still have the option to file anyway.

Under Chapter 13 bankruptcy, you will generally have between 36 and 60 months in which to repay your debts. The payment plan will often include additional expenses such as taxes and child support so that it is easy to keep up with all of your obligations.

Avoiding Tax Issues During Chapter 13 Bankruptcy

There are a few tips to avoid tax problems during Chapter 13 bankruptcy, which includes:

• Acting fast: You want to file your tax returns in a timely manner. You should do this shortly after filing for bankruptcy. If your tax returns are late or missing, your case might be at risk. In the event you are unable to file your tax return, you should request an extension.
• Obligations: Filing for bankruptcy might discharge some older income tax obligations. However, you need to consider priority tax obligations. These types of taxes don’t face elimination, so you should factor them into your repayment plan. Certain property taxes, payroll taxes and employment taxes are examples of such obligations.

An attorney can help you through your bankruptcy case. Sometimes it’s beneficial to file your taxes before you file bankruptcy. If you happen to receive a refund, avoid using the money to pay bills until the case is finalized. Filing your taxes on time each year is the best route.

Helping You Find The Right Debt Relief Solution Through Chapter 13 Bankruptcy

There are some distinct differences between Chapter 7 and Chapter 13. Under Chapter 13, you would repay your potentially reduced debt over a three- to five-year period, often at better terms and lower interest rates. You would make one payment to your trustee to satisfy all your debts. Unlike Chapter 7, you are not at risk of losing any of your property because you are repaying your debt over time.

When you hire our firm, your attorney will provide you with a complete evaluation of your case and explain exactly what to expect throughout the process. We will help you complete your initial application, be there with you at hearings and meetings, deal with any creditor issues that arise, and manage your case until you receive the discharge.

Call For A Consultation

Reach out to us today to explore your options and see if a Chapter 13 bankruptcy is the right solution for you. We’re here to answer your questions during our regular business hours. We also offer evening and weekend appointments. You can call us at 813-302-1258 or send an email.

We are a debt relief agency. We help businesses and individuals file for debt relief under the Bankruptcy Code.