If you are considering a personal bankruptcy, the two most common options are filing under Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code. At St. Louis Morris, P.A., we can help you choose the option that is best for your personal circumstances, and we will represent you throughout the entire bankruptcy process. To learn more, request a free consultation today.
For many people who fall on hard times, filing for bankruptcy is the best way to get back on their feet. Although filing for bankruptcy does have certain consequences, for those who are unable to pay their debts, bankruptcy can be a safe, cost-effective way to get back on top of their finances.
At St. Louis Morris, P.A., we help individuals in South Florida file for bankruptcy under Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code. Both options offer different benefits, and each chapter has its own limitations and requirements as well. Continue reading to learn more about Chapter 7 and Chapter 13 bankruptcies, and then feel free to contact us for a complimentary initial consultation to discuss your options.
What is a Chapter 7 Bankruptcy?
In a Chapter 7 bankruptcy, you can obtain a discharge of most of your unsecured debts. This includes obligations such as credit card debts, medical bills, past-due rent and utility bills, and dishonored checks. Once these debts are “discharged,” they are wiped out, and you are no longer obligated to pay or at risk for being held in default.
In order to qualify for a Chapter 7 bankruptcy, you must satisfy what is known as the “means test.” The means test examines your ability to pay your debts, taking into consideration certain basic living expenses and the average median income in Florida. If you have been out of work or working in a relatively low-paying job for the last six months, you may be eligible to file under Chapter 7. When you contact us, one of our first steps will be to determine if you qualify under Chapter 7 (if you do not qualify under Chapter 7, then you will likely need to file under Chapter 13).
Importantly, not all debts are subject to discharge in a Chapter 7 bankruptcy. Some of the debts that you cannot avoid paying under Chapter 7 include:
- Student loans
- Certain taxes
- Unpaid child support
Filing under Chapter 7 may help you protect your home from foreclosure. Filing for bankruptcy postpones the foreclosure process; and, if you can catch up on your mortgage payments once your other debts are discharged (or if you can work out another solution with your mortgage lender), you will be able to stay in your home after your Chapter 7 bankruptcy.
In most cases, the process of discharging debts in a Chapter 7 bankruptcy takes 60 to 90 days from the date the bankruptcy petition is filed.
What is a Chapter 13 Bankruptcy?
Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy does not result in an immediate discharge of debts. Instead, in a Chapter 13 bankruptcy you establish a plan to pay off your outstanding debts – usually over a three to five-year period. If any lenders agree to accept only partial payment (provided that you pay consistently throughout your repayment plan), then the remainder of these debts will be discharged at the end of the repayment period.
Also unlike a Chapter 7 bankruptcy, if you file under Chapter 13, you will not face the possibility of being forced to give up any of your assets. In a Chapter 7 bankruptcy, it is possible for creditors to seek certain “nonexempt” assets as partial payment in exchange for a discharge. In a Chapter 13 bankruptcy, as long as you keep up with your payment plan, you do not have to worry about losing your property.
Which Option is Best for You?
When you contact us for your complimentary consultation, we will go over these options in detail, and we will also examine any other options that you may have available. Our goal is to help you get out of debt and re-establish your financial standing as quickly as possible. Whether that means filing for bankruptcy under Chapter 7 or Chapter 13 (or considering another alternative), you can trust us to guide you and keep your best interests in mind every step of the way.
Schedule Your Free Bankruptcy Consultation Today
For more information about filing for bankruptcy under Chapter 7 or Chapter 13, contact us for a free, no-obligation consultation with attorneys Vladimir St Louis and Amanda Morris. To get on the road to financial recovery, call our South Florida law offices at 954-239-2175 or send us a message online today.