When you’re pondering filing bankruptcy in Pensacola, Florida, you must know what Chapter 7 and Chapter 13 bankruptcy differ from one another. Both can provide you relief from suffocating debt, but each offers differing benefits based on your financial situation.
Here’s what you should know to make an educated choice.
Chapter 7 Bankruptcy: A New Beginning for People with Limited Income
Chapter 7 bankruptcy, also referred to as “liquidation,” is the best option for people with limited income and large amounts of unsecured debt. The primary advantages of Chapter 7 are:
- Debt Discharge: Under Chapter 7, most unsecured debts, such as credit card debt and bills for medical treatment, are discharged, and you are no longer responsible for paying them.
- Rapid Process: Chapter 7 is usually finished within 3 to 6 months. This is the quickest means of discharge of debt and beginning anew.
- Asset Sale: Certain of your non-exempt property can be liquidated to satisfy creditors. Florida, however, has generous exemptions that will let you retain your home, vehicle, and other necessary property.
- Eligibility: To be eligible for Chapter 7, you have to pass the means test, which looks at your income and expenses. If your income is at or below the state median, you might qualify automatically.
Chapter 13 Bankruptcy: Pay Debts Over Time
Chapter 13 bankruptcy, also referred to as “reorganization bankruptcy,” is suitable for individuals with a regular income and who require assistance in managing their debts.
Here’s what to think about:
- Debt Reorganization Plan: Chapter 13 enables you to reorganize your debts into an affordable repayment plan, usually 3 to 5 years. At the end of the plan, any outstanding unsecured debt could be wiped out.
- Keep Assets: In contrast to Chapter 7, you do not need to sell your assets. Chapter 13 permits you to retain your home, vehicle, and other property provided you stick to the repayment plan.
- Eligibility: Chapter 13 is for individuals with steady income who have more debt than they can handle to qualify for Chapter 7 or who need to pay back past-due payments, like a car loan or home mortgage.
Bottom Line!
At Bruner Wright PA, our skilled bankruptcy lawyers are ready to assist you in making the correct decision for your financial case. We will evaluate your debts, income, and assets to determine which Chapter 7 or Chapter 13 will suit you best. From the filing of your petition to assisting you through the repayment plan or discharge process, we are dedicated to assisting you in obtaining a new beginning financially.
This post was written by Trey Wright, an experienced bankruptcy lawyer Jacksonville FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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