Make us your home page

Chapter 13 a 'blessing' amid burdens of financial crisis

Lorene Whitehead, who owns Lorene’s Fish and Crab House in St. Petersburg, got into financial trouble when nearby construction hurt business. She filed a bankruptcy petition under Chapter 13, allowing her to repay her debts over time.


Lorene Whitehead, who owns Lorene’s Fish and Crab House in St. Petersburg, got into financial trouble when nearby construction hurt business. She filed a bankruptcy petition under Chapter 13, allowing her to repay her debts over time.

Not many people would classify going through bankruptcy as a religious experience. But when Lorene Whitehead received her Chapter 13 discharge last month, she celebrated with her prayer group.

"I rejoiced; it was such a wonderful thing," she said. "They just praised God with me. It was a blessing to be able to do this."

Whitehead, 58, says she got into financial trouble when nearby construction hurt business at her St. Petersburg restaurant, Lorene's Fish and Crab House. She struggled for years trying to avoid bankruptcy, but concluded it was the only way she could save her home and car.

"My home was getting ready to go into foreclosure," she said. "They had repossessed my Buick."

Whitehead's Chapter 13 filing saved both, allowing her to catch up on her missed payments and eliminate some of her other debts by paying $578 a month for five years.

"It was like lifting a burden," she said. "I had been getting phone calls all day long, and every day the mailman was bringing me bounced checks and creditors' bills."

Completing the plan wasn't easy. At one point, Whitehead got sick and fell behind in her payments, but the court gave her three months to catch up. Last month she completed her plan and got her discharge.

Most people who file for bankruptcy still do so under Chapter 7, which allows them to wipe out most debts relatively quickly, paying pennies on the dollar or nothing at all. But about 35 percent opt for a repayment plan under Chapter 13.

Some of them have no choice. The 2005 bankruptcy reform requires repayment plans for people with higher incomes. However, others choose Chapter 13 because it gives the time they need to catch up on missed payments and save a house or a car. Some even choose Chapter 13 because it allows them time to pay unsecured debts, such as medical bills, that they genuinely want to pay.

"We like to think of ourselves as the friendlier side of bankruptcy," said Hank Hildebrand, a Chapter 13 bankruptcy trustee in Nashville. He is part of the National Association of Chapter 13 Trustees, which is trying to educate consumers with debt problems about their options.

"You may not need bankruptcy," he said. "You may be able to deal with creditors directly, particularly if there are only one or two."

But he said consumers need to know that bankruptcy is available if they do need it.

"Many people don't understand that there is a way to repay their debts through bankruptcy," Hildebrand said.

However, a payment plan works only if you have the resources and the discipline to make the payments. About 30 percent of those who start a Chapter 13 plan complete it, Hildebrand said. Those who fail usually have the option of converting to a Chapter 7.

Chapter 7 may be a better option from the beginning for other debtors, particularly people who want to get out of homes or cars that are worth less than the debt attached to them.

Of course, everybody's situation is a little different, which is why it's good to get personalized advice from a bankruptcy lawyer.

Chapter 13 a 'blessing' amid burdens of financial crisis 06/07/08 [Last modified: Saturday, June 7, 2008 4:32am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Tampa chamber of commerce votes against tax increase on business property


    TAMPA — The Greater Tampa Chamber of Commerce on Thursday voted against supporting a city of Tampa plan to raise taxes on commercial properties in the city for 2018. The property tax, included in the city's proposed $974 million budget, would boost taxes from $5.73 to $6.33 for every $1,000 in property value.

    The Greater Tampa Chamber of Commerce voted against supporting a city tax hike on commercial property. Pictured is Bob Rohrlack, CEO of the chamber. | [Times file photo]
  2. Did Hurricane Irma speed the end of Florida orange juice?


    Hurricane Irma plundered Florida's orange belt, leaving a trail of uprooted trees, downed fruit and flooded groves worse than anything growers say they have seen in more than 20 years.

    A large number of oranges lie on the ground at the Story Grove orange grove in the wake of Hurricane Irma on Sept. 13, 2017, in Lake Wales. [Photo by Brian Blanco | Getty Images]
  3. St. Petersburg's newest hotel opens with craft beers, cocktails and Cozy Corners

    Real Estate

    ST. PETERSBURG — Last spring, Ryan Tarrant applied for a job with the new Hyatt Place nearing completion in downtown St. Petersburg. Among the questions an interviewer asked:

    What does this hotel need to succeed?

    Hybar, a bar area with outdoor seating  that will feature craft drinks and Sunday brunch starting Oct. 1, is ready to open at the new Hyatt Place hotel at  25 2nd St. N in downtown St. Petersburg. [SCOTT KEELER   |   Times]
  4. Culver's crosses into Brandon near Selmon Expressway


    BRANDON — Like many children, Theresa Hutchins recalls pleading with her parents to take her for ice cream.

    Theresa Hutchins and her fianc? Mike Carelli opened the Tampa Bay area’s newest Culver’s August 28 in Brandon at 2470 S Falkenburg Road.
  5. Back to life: Event helps Riverview revert to peaceful pace after Irma

    Human Interest

    RIVERVIEW — Robin and Ray Castell say establishing residency in the Winthrop Village was one of the best decisions of their lifetime.

    hillsbrandon092217: Meredith Tucker of Riverview, the mother of two children and another one soon on the way, browses the racks of Dot Dot Smile children?€™s clothing as company merchandiser Kelcie Schranck, standing behind her in the black shirt, looks on during the first-of-its-kind Recruiting the Community event on Sept. 17 at the Barn at Winthrop in Riverview. Photo by Joyce McKenzie.