Should I File for Chapter 7 or Chapter 13 Bankruptcy in Florida?

 Posted on June 01,2020 in Bankruptcy

Filing for bankruptcy is often the last thing that a person wants to do, which is why many people only consider bankruptcy if they feel they have no other options. Many people may falsely believe that filing for bankruptcy means handing over everything they have. Luckily, there are two types of bankruptcy which allow individuals to choose which one works best for them and avoid losing all of their assets to pay off their debts. Since filing for bankruptcy is often a last resort, you may not be educated on the topic. If you find yourself facing financial difficulty, it is important to understand which type of bankruptcy fits your unique situation.

Chapter 7 Bankruptcy

This type of bankruptcy is the more well-known of the two options. Also known as liquidation bankruptcy, Chapter 7 bankruptcy allows individuals to discharge or eliminate their outstanding debts after their bankruptcy trustee sells their property or assets to pay off as much of their debts as possible. Chapter 7 bankruptcy is typically only used by those who have little to no disposable income. In other words, if you do not have enough income left over after paying ongoing expenses to repay some or all of your debts, you should consider filing for Chapter 7 bankruptcy. The court will use a Chapter 7 means test to see if you are eligible to file for this form of bankruptcy, and if you qualify, you can report the income you earn and the assets you own. Non-exempt assets will be turned over to the bankruptcy trustee to be liquidated, but there are a variety of exemptions that will allow you to keep certain property, and once the bankruptcy process is complete, you will no longer be required to pay your debts. Filing for Chapter 7 bankruptcy should be done with the help of an experienced bankruptcy lawyer who can ensure that you report all income and assets properly and that your debts are fully discharged.

Chapter 13 Bankruptcy

The second type of bankruptcy does not require the liquidation of assets. Those filing for Chapter 13 bankruptcy will create a court-mandated repayment plan to pay back their creditors. These payments will typically be made over a three- to five-year period. If you have a sufficient income and do not qualify for Chapter 7 bankruptcy, Chapter 13 bankruptcy will allow you to create a manageable plan, and once your repayment plan is complete, any remaining debts included in the plan will be discharged. This option may be a good choice if you are a homeowner who is struggling to pay your mortgage. Filing for Chapter 13 bankruptcy can put a hold on the foreclosure process and allow you to make up your late mortgage payments and keep your home. 

Contact a Fort Lauderdale Bankruptcy Attorney

While the information above may give you a better understanding of your bankruptcy options, it is always a good idea to work with a knowledgeable attorney who can help you determine the best steps to take in your individual situation. Filing for bankruptcy can be a complex process, but by working with the proper bankruptcy lawyer, you can complete this process successfully and regain financial stability. At the Elliot Legal Group, P.A., we will guide you in the right direction and help you overcome the debts and financial difficulties you are facing. With nearly 20 years of legal experience, Attorney Gavin Elliot can help you understand how to protect your financial future. Contact our skilled Broward County bankruptcy lawyer at 754-332-2101 to schedule a free bankruptcy consultation.

Sources:

https://www.experian.com/blogs/ask-experian/bankruptcy-chapter-7-vs-chapter-13/

https://www.creditkarma.com/advice/i/chapter-7-vs-chapter-13/