Types of Bankruptcy Relief Available

For consumer debtors, there are two primary chapters that offer bankruptcy relief - Chapter 7 and Chapter 13.

CHAPTER 7

The most common type of bankruptcy proceeding is a Chapter 7 liquidation bankruptcy. It is called a "liquidation" bankruptcy because the trustee will sell (or liquidate) non-exempt property of the debtor and the proceeds of the sale will be equally distributed between the creditors. Under a Chapter 7 bankruptcy, your debts can be discharged (wiped out)by the court within 3 to 4 months if there are no objections by creditors or by the trustee. No payments have to be made to creditors once the matter is discharged.  Contact Fort Lauderdale Bankruptcy Lawyer Carmen G. Soto to assist you in your bankruptcy case.

CHAPTER 13

Bankruptcy proceedings under Chapter 13 bankruptcy are a little different than Chapter 7. In a Chapter 13 bankruptcy, your disposable income is paid out to creditors over three to five years. Once you are done with your payment plan, the remainder of your debts are discharged. Disposable income means whatever money is left over to pay creditors after your everyday living expenses are deducted from your income. Although you have to pay a portion of your debt, there are benefits to a Chapter 13. Under Chapter 13, you can keep your non-exempt property. You can also force your mortgage company or car loan company to allow you to catch up on any missed payments under the plan. The payment plan has to be approved by the courts and it is only available to debtors that have regular wages or a steady source of income.

In the majority of cases, debtors do not lose property in a bankruptcy. Under current Florida law, you are allowed to keep property up to the statutory and constitutional limits. It is important to know that although a bankruptcy will stop foreclosure and repossession actions upon filing, if you want to keep your house and your car, you will have to continue making those payments. Loans for homes and cars are secured by the property you bought and if you don't make the payments the creditors will eventually be able to take the property.  Contact Fort Lauderdale Bankruptcy Lawyer Carmen G. Soto to assist you in your bankruptcy case.