Life-changing events such as loss of employment, divorce or medical emergencies can lead an individual or family feeling overwhelmed by their debt.
If you are struggling to pay your mortgage, bank loans, credit card payments, car loans, or medical bills then filing bankruptcy may be a practical way of dealing with your overwhelming debt. Once bankruptcy is filed, creditors cannot try to collect debts or sue you to obtain a judgment without obtaining the bankruptcy court’s permission.
Generally there are two types of bankruptcy cases filed by consumers: Chapter 7 and Chapter 13. A test is used to analyze your income and expenses to determine which type of bankruptcy you qualify to file. The test will be applied to determine if you can file Chapter 7 or if you must file Chapter 13.
Chapter 7 is a liquidating bankruptcy and is the most common bankruptcy case filed by consumers. In return for obtaining a discharge for debts, debtors must turn over all property except certain exempt property to the bankruptcy trustee. Florida has very broad exemption laws including your homestead or a $4000 “wildcard” exemption if you do not own and reside in your home; other exemptions enable you to retain additional property despite the bankruptcy filing. Non-exempt property is sold by the bankruptcy trustee who then distributes the proceeds among creditors according to priorities established by law. Emerging from bankruptcy discharged from debt and with no future obligations to creditors is the principal advantage to Chapter 7 bankruptcy. It should be noted not all debts can be discharged in bankruptcy. Certain debts such as alimony, child support, student loans, fraudulent debts and other specific debts cannot be discharged.
Chapter 13 bankruptcy is a reorganization bankruptcy and most commonly filed by consumers wanting to keep their valuable exempt and/or nonexempt property interests. A 3-5 year repayment plan is proposed by the debtor to the creditors to pay all or a portion of the debts from the debtor’s income under a Chapter 13 bankruptcy. By adhering to the terms of the repayment agreement, all the dischargeable debt will be released at the end of the plan.
Bankruptcy is a complex area of law. A bankruptcy attorney can help you make informed decisions and explain the process thoroughly. A knowledgeable bankruptcy attorney will make use of exemptions and has a clear understanding of the protections of the Bankruptcy Code and will use them to your advantage.
There is no longer a stigma attached to filing bankruptcy. The consequences to filing are manageable and at times even beneficial. For example, getting a mortgage and re-establishing your credit rating only a few short months after bankruptcy is possible.
For over 50 years, the attorneys at Goldstein, Buckley, Cechman, Rice & Purtz have been representing Southwest Florida clients in bankruptcy cases. We provide a free consultation to discuss if filing for bankruptcy is right for you. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Goldstein, Buckley, Cechman, Rice & Purtz, P.A. has six offices in Southwest Florida. The offices are located in Fort Myers (two offices to serve you), Cape Coral, Naples, Lehigh Acres, and Port Charlotte for your convenience. Call us first at 800-332-9404 or fill out a simple case form today.