Bankruptcy

Chapter 7 Bankruptcy

Persons, corporations, partnerships and other business entities may qualify for Chapter 7. It is best suited for people who have a very large amount of debt, but few assets. This bankruptcy chapter allows you to discharge or wipe out all of your debt (with some exceptions) while keeping your exempt property. Non-exempt property is surrendered to the trustee and potentially sold to pay off creditors. You must pass a “means test” to qualify. The means test looks at your household income and compares it with the local median income for your household size. This test determines whether you can repay some or all of your debts out of your disposable income within a five-year time frame. If it is determined that you can repay a certain amount over that time frame, then a chapter 13 would be appropriate. The U S Trustee may try to challenge a chapter 7 filing, claiming the filing to be abusive after reviewing your monthly budget and the means test.

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Chapter 7 Bankruptcy

Persons, corporations, partnerships and other business entities may qualify for Chapter 7. It is best suited for people who have a very large amount of debt, but few assets. This bankruptcy chapter allows you to discharge or wipe out all of your debt (with some exceptions) while keeping your exempt property. Non-exempt property is surrendered to the trustee and potentially sold to pay off creditors. You must pass a “means test” to qualify. The means test looks at your household income and compares it with the local median income for your household size. This test determines whether you can repay some or all of your debts out of your disposable income within a five-year time frame. If it is determined that you can repay a certain amount over that time frame, then a chapter 13 would be appropriate. The U S Trustee may try to challenge a chapter 7 filing, claiming the filing to be abusive after reviewing your monthly budget and the means test.

Filing Chapter 7 can help you rebuild your credit. On the other hand, it will stay on your credit report for 10 years and it will make credit terms less favorable to you.

Get back on track, and come see Suncoast Legal Center to file a Chapter 7 bankruptcy. We will help you get a fresh start. Our lawyer will answer your questions during your free consultation. To schedule, call (941) 552-7883

Chapter 13 Bankruptcy

People who have regular incomes that are too high to qualify under Chapter 7 and/or have non-exempt property that they do not want to surrender to the trustee may file a Chapter 13 case. The debt will be restructured, allowing them to repay a portion of it over 3 to 5 years. They can reduce unsecured debts, such as credit cards and medical bills, in some cases to 0%. Monthly income is one factor that determines the repayment amount. Chapter 13 is best for situations such as late mortgage payments, overdue vehicle loans, IRS tax debt, and unpaid child support. The Bankruptcy court will be able to approve a chapter 13 plan without the approval of creditors as long as it meets the statutory requirements. A Chapter 13 plan can also been seen as a form of debt consolidation, but it does so much more than simply consolidate credit card debt or personal loans.

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A chapter 13 bankruptcy may allow you to “cram down” a vehicle loan (or other secured loan) and pay the value of the vehicle (or other collateral) over a 5-year period at a set interest rate instead of the higher loan balance owed. Chapter 13 is a common tool for stopping foreclosures on a home. Upon your filing your case, the court issues an automatic stay that stops the State Court from proceeding with the foreclosure. It allows you to keep your home by giving you up to 5 years to catch up on past due mortgage payments. Chapter 7 bankruptcy does not give you this benefit. In fact, it is important that you are current on your home when filing chapter 7, unless you want to surrender it. In addition, under chapter 13 you may be able to lien strip or remove a second mortgage or equity line from your home. You may be eligible to do this even if you are current on your mortgage.

Don't hesitate, call Suncoast Legal Center and reclaim your financial future with our outstanding service and flexible payment plans. Our lawyer will answer your questions during your free consultation. To schedule, call (941) 552-7883.

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Automatic Stay

Upon filing your bankruptcy petition, the court will issue an automatic stay, stopping all collection activity. These activities include garnishments, lawsuits, harassing phone calls, impending repossessions, tax levies, and foreclosures.

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Stop Home Foreclosure

Your mortgage lender will be prevented from foreclosing your home when you file a bankruptcy petition. Only chapter 13 bankruptcy allows you to keep your home by giving you up to 5 years to catch up on past due mortgage payments.

Additionally, under chapter 13, you may be able to lien strip or remove a second mortgage or equity line from your home. You may be eligible to do this even if you are current on your mortgage.

As for Chapter 7, you must be current on your home unless you want to surrender it.

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