Bankruptcy

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Bankruptcy Law Overview

Bankruptcy law provides individuals and businesses with a way to address overwhelming debt and financial distress. Filing for bankruptcy offers a legal process to either discharge debts or create a manageable repayment plan. It is designed to help people regain control of their financial future while providing creditors with a fair method of repayment. Bankruptcy laws are governed by federal law, with some state-specific regulations that can impact your options and the process.

The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13. Each has distinct benefits and requirements, so understanding the differences is essential in making an informed decision about your financial future.

Chapter 7 Vs. Chapter 13 Bankruptcy

Chapter 7 Bankruptcy: Liquidation

Chapter 7 is often referred to as “liquidation” bankruptcy. It allows individuals to discharge most of their unsecured debts, such as credit card debt, medical bills, and personal loans. In exchange, the debtor’s non-exempt assets may be sold to pay off creditors. However, many individuals who file for Chapter 7 bankruptcy do not lose significant assets, as they can often qualify for exemptions that protect their property.

Key Features Of Chapter 7:

Fast Process: It typically takes 3 to 6 months to complete.
Debt Discharge: Most unsecured debts are eliminated, giving individuals a fresh start.
Means Test: To qualify for Chapter 7, you must pass the means test, which compares your income to the median income for your state.
Asset Liquidation: Some non-exempt property may be sold to repay creditors, but many assets are protected.

Chapter 13 Bankruptcy: Reorganization

Chapter 13 is known as “reorganization” bankruptcy. Instead of discharging debts, it involves creating a repayment plan to pay off all or a portion of your debts over a 3- to 5-year period. This option is suitable for individuals with a regular income who may not qualify for Chapter 7 or who want to protect certain assets from liquidation.

Key Features Of Chapter 13:

Fast Process:You propose a repayment plan that lasts 3 to 5 years, during which you pay a portion of your debt, often with lower monthly payments.
Asset Protection: Unlike Chapter 7, your assets are not at risk of being liquidated as long as you stick to the repayment plan.
Eligibility: You must have a regular income and be able to make payments according to the repayment plan.
Asset Liquidation: Chapter 13 has debt limits that must be met, so it’s not available to everyone.

Debt Relief Options

In addition to Chapter 7 and Chapter 13, there are other options available for debt relief, depending on your financial situation:

Debt Settlement
This involves negotiating with creditors to settle your debts for less than what you owe. While it can reduce the amount you owe, it may have a negative impact on your credit and require a lump-sum payment.
Debt Consolidation
This involves negotiating with creditors to settle your debts for less than what you owe. While it can reduce the amount you owe, it may have a negative impact on your credit and require a lump-sum payment.
Credit Counseling
If you are struggling with debt but don’t want to file for bankruptcy, credit counseling services may help you create a budget, work with creditors to lower payments, and explore other solutions.

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Bankruptcy FAQ & Legal Advice

1. How Do I Know If Bankruptcy Is The Right Option For Me?

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2. Will Bankruptcy Eliminate All My Debts?

3. How Long Will Bankruptcy Stay On My Credit Report?

Contact Us For Legal Assistance

If you are considering filing for bankruptcy, it’s crucial to have experienced legal counsel to guide you through the process and ensure you make the best decision for your financial future. Contact our team of bankruptcy attorneys today for a consultation. We’ll review your financial situation, explain your options, and help you navigate the bankruptcy process with confidence.

Call Us Today! (407) 268-6844

Bankruptcy

Bankruptcy Law Overview

Chapter 7 Vs. Chapter 13 Bankruptcy

Chapter 7 Bankruptcy: Liquidation

Key Features Of Chapter 7:

Chapter 13 Bankruptcy: Reorganization

Key Features Of Chapter 13:

Debt Relief Options

What our customers say

I had an excellent experience working with Strawcutter Law

Brandan M.

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Tyler G.

I had an excellent experience working with Strawcutter Law

Brandan M.

The Best Law Firm ever!

Tyler G.

I had an excellent experience working with Strawcutter Law

Brandan M.

The Best Law Firm ever!

Tyler G.

Bankruptcy FAQ & Legal Advice

1. How Do I Know If Bankruptcy Is The Right Option For Me?

2. Will Bankruptcy Eliminate All My Debts?

3. How Long Will Bankruptcy Stay On My Credit Report?

Contact Us For Legal Assistance

Contact Us Today!

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