Florida Bankruptcy Attorney
For most people, filing bankruptcy is a last resort. Still, if you are successful with your case bankruptcy is a great way to clean your financial slate and get back on your feet. The bankruptcy process is more complex than many people think, though, and involves more than simply filling some forms with the court. Our Florida bankruptcy attorney can guide you through the process to give you the best chance of discharging or restructuring your debt.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is one of the most common types filed in Florida. This legal process can allow you to discharge, or eliminate, most or all of your unsecured debt. Over recent years, though, the process has become much more difficult and there are many steps to take.
The first step in filing Chapter 7 bankruptcy is determining if you are eligible. To qualify, you must pass the means test. The means test compares your household income with the state’s average for a family of the same size. If your income is below the state median income, you are exempt from the means test. If you are eligible, you must then file a petition with the appropriate court.
The petition essentially asks the court to discharge your debt. After filing your petition, the court will issue an automatic stay. The automatic stay prohibits debt collectors and creditors from contacting you in an attempt to recover the money owed. The automatic stay also prohibits creditors from taking legal action against you.
Chapter 7 is also known as liquidation bankruptcy because some of a borrower’s assets may be sold to repay the creditors. Florida law outlines many generous exemptions that protect property. It is very possible to file Chapter 7 bankruptcy and not lose any assets at all.
What is Chapter 13 Bankruptcy?
When people do not pass the means test, or they want to ensure they will not lose any property, they often file Chapter 13 bankruptcy. Chapter 13 does not discharge debt but rather, it reorganizes it into a repayment plan. To be eligible, you must have a regular source of income. If you are filing as a married couple, only you or your spouse must have a regular source of income. It is for this reason that Chapter 13 is also known as a wage-earner’s bankruptcy.
The repayment plan in Chapter 13 bankruptcy typically spans three to five years. Spreading debt out over this amount of time makes payments smaller and more manageable. You must submit the repayment plan within 14 days after you file. Chapter 13 can only address certain levels of debt. If you have debt higher than this, you may have to file Chapter 11.
Call Our Bankruptcy Attorney in Florida Now
Bankruptcy is a complicated process, but our Florida bankruptcy attorney at Ronald Cutler can help. Call or text us now at 386-490-9949 or chat with us online to schedule a free review of your case and to learn more about your legal options.