Due to the economic troubles we've seen in the last few years, many Americans are turning to Bankruptcy Courts as a way to start with a clean slate in the wake of financial hardship. To accomplish this, most individuals will look to file Chapter 7 or Chapter 13 bankruptcy, while businesses commonly file for Chapter 7 or Chapter 11 bankruptcy.

      Our law office can answer all of your questions about this daunting process during our FREE initial consultation, determine which solution is best for your personal situation and walk you through the steps one by one.

      Chapter 7 bankruptcy is most common; it is sometimes referred to as "liquidation bankruptcy," or "straight bankruptcy." The basic purpose of chapter 7 is to start over with a clean slate by eliminating qualifying debt including credit cards, medical bills, repossession deficiencies and law suits, as well as a variety of other debts. Bankruptcy attorneys can assist greatly in this process.

      In chapter 7, there is no repayment required for most unsecured debts -- your debts are wiped out completely and permanently. In the vast majority of chapter 7 cases, the consumer keeps all property, and eliminates most debts. From start to finish, the process usually takes under 4 months. After the bankruptcy is complete, the consumer may choose to pay back specific debts, such as debts to family members, but repayment is not legally required.

      Chapter 13 Bankruptcy provides consumers with a way to consolidate debt under federal law. Debt is restructured to allow the consumer to repay creditors a portion of what is owed over time. The principle behind chapter 13 is that the consumer makes sufficient income to pay all current living expenses (rent, food, car, utilities, etc.), but not enough to pay all debts in full or meet the creditor's requirements. With chapter 13, living expenses are paid first, and then whatever is left over goes into the consolidation plan.

      The plan is usually not based on what you owe; rather, it is based on your means to repay. The calculation of your plan payments involves many variables, but is primarily based on your income and expenses. Whatever funds are left after monthly living expenses goes into the plan, even if it only pays creditors pennies on the dollar. Chapter 13 is structured to be most useful for consumers with assets over the exemption amounts, or non-dischargeable debts.

Chapter 7 Bankruptcy Chapter 13 Bankruptcy

Law Office of John Karl Schwartz Jr. (407) 932-2883
318 N. John Young Parkway, Suite 6 Kissimmee, FL 34741	395 E. Central Avenue Winter Haven, FL 33880
600 Bypass Drive, Suite 207 Clearwater, FL 33764