Short answer: Chapter 13 bankruptcy lets people with regular income restructure their debts into a single, court-approved repayment plan lasting three to five years. Unlike Chapter 7, it is built for keeping property: it can stop a foreclosure and let you catch up on missed mortgage payments over the life of the plan. To qualify, your debts must fall under the current limits — $1,580,125 in secured debt and $526,700 in unsecured debt for cases filed between April 1, 2025 and March 31, 2028 — and you must have enough steady income to fund the plan.
How Chapter 13 Works
Chapter 13 is often called “wage earner’s bankruptcy” because it is designed around a regular paycheck. Instead of liquidating assets, you propose a plan to pay creditors some or all of what you owe over three to five years. Once the court confirms the plan, you make one consolidated monthly payment to a trustee, who distributes it to creditors. When you complete the plan, most remaining unsecured debt is discharged.
Filing immediately triggers the automatic stay: foreclosures, repossessions, garnishments, and collection calls must stop while the case is pending. Chapter 13 also includes a co-debtor stay that protects people who co-signed consumer debts with you — something Chapter 7 does not offer.
Who Qualifies for Chapter 13 in Florida?
- Regular income: you need reliable income — wages, self-employment income, retirement income, or a combination — sufficient to cover living expenses plus the plan payment.
- Debt limits: for cases filed on or after April 1, 2025, noncontingent, liquidated debts must not exceed $1,580,125 (secured) and $526,700 (unsecured). These limits are adjusted every three years.
- Individuals only: Chapter 13 is for people, not corporations or LLCs, though sole proprietors can include business debts.
How Long Is the Plan — Three Years or Five?
Plan length is tied to the means test comparison used in Chapter 7: filers below Florida’s median income for their household size can generally propose a three-year plan, while filers above the median must commit to five years. Either way, five years is the maximum.
How Much Will the Monthly Payment Be?
There is no fixed formula that fits every case, but the plan payment is generally driven by four things:
- Required payments: mortgage or car arrears being cured, plus ongoing secured payments made through the plan.
- Priority debts: recent taxes and domestic support obligations must be paid in full.
- Disposable income: what remains of your income after reasonable living expenses must go to unsecured creditors.
- The liquidation test: unsecured creditors must receive at least as much as they would have in a Chapter 7 liquidation.
The trustee is compensated with a percentage fee (capped at 10%) added to the payments flowing through the plan. The court filing fee for Chapter 13 is $313, and it can be paid in installments.
What Chapter 13 Can Do That Chapter 7 Cannot
- Stop foreclosure and cure arrears: missed mortgage payments can be spread over the plan while you resume regular payments.
- Protect non-exempt property: you keep assets that might be at risk in Chapter 7, paying their value through the plan instead.
- Manage car loans: in some situations, older vehicle loans can be restructured based on the vehicle’s value.
- Handle debts Chapter 7 leaves behind: tax debt and other non-dischargeable obligations get organized into one manageable payment.
Frequently Asked Questions
Can I keep my house in Chapter 13 in Florida?
That is the most common reason people choose it. If you can resume regular mortgage payments and pay off the missed ones through the plan, Chapter 13 is specifically designed to let you keep your home. Florida’s homestead protections also remain available.
What happens if my income changes during the plan?
Plans can be modified. If your income drops, your attorney can ask the court to reduce payments, and in hardship situations other options exist, including converting to Chapter 7.
Do I pay all my debts back in Chapter 13?
Not necessarily. Many filers pay only a portion of their unsecured debt — the amount depends on disposable income and the value of non-exempt assets. Whatever qualifying unsecured debt remains at the end of a completed plan is discharged.
How soon does the foreclosure stop after filing?
The automatic stay takes effect the moment the case is filed, halting a pending foreclosure sale. Timing matters, though — filing before a scheduled sale date is critical, so do not wait until the last minute to get advice.
This article provides general information and is not legal advice. Every Chapter 13 case depends on individual income, assets, and goals. If you are facing foreclosure, garnishment, or unmanageable debt anywhere in North Florida, contact our office for a consultation about whether Chapter 13 is the right tool for you.