Two of the most common bankruptcy filings are Chapter 7 and Chapter 13. When looking to file for bankruptcy, choosing the correct chapter is incredibly important. Filing for the wrong chapter can lead to a dismissal of the case. With the proper help from a bankruptcy attorney in Sarasota, FL. individuals and businesses will file for the correct chapter of bankruptcy. A bankruptcy attorney can also help with the complicated court filings and communication. While Chapter 7 and Chapter 13 are both forms of bankruptcy, they are very different. The differences should be understood before bankruptcy papers are filed with the court.
Chapter 7 bankruptcy is one of the most common non-business related bankruptcy case, it can also pertain to businesses. Chapter 7 bankruptcy, unlike Chapter 13 Bankruptcy, involves liquidation of assets to pay back the money that is owed to creditors. Chapter 7 bankruptcy also allows the individual to keep certain property as long as it is deemed “exempt.” Individuals and businesses who file under Chapter 7 must pass the “means test” in order to qualify for Chapter 7 bankruptcy.
Chapter 13 bankruptcy will allow the individual or business to adjust their debts in order to pay them back over time. Individuals and businesses who bring in a regular income can apply for Chapter 13 bankruptcy, adjust their debt, and pay off the debt with a court-structured payment plan over 3-5 years. Chapter 13 bankruptcy is a much better option for many individuals because assets will be kept from the liquidation process and a home can be saved from foreclosure. Only individuals and businesses that have unsecured debt less than $383,000 and secured debt lower than $1.15 million can file for Chapter 13.
This is a simple and quick overview of two of the most common bankruptcy filings in the nation. In order to learn more about filing for bankruptcy call the professionals at Galarza Law Firm. We can help you navigate through bankruptcy cases. We’ll ease your stress and help you get out from under your debt. Call today for a free consultation.