Chapter 7 and Chapter 13 Bankruptcy
Chapter 7 and Chapter 13 bankruptcies help debtors obtain a fresh start. Chapter 7 bankruptcy is typically used for debtors who have unsecured debts. Chapter 13 bankruptcy is typically used for debtors who have secured debts such as a home mortgage.
At Lulich & Attorneys, our Vero Beach and Sebastian lawyers understand the alternatives to bankruptcies and when bankruptcy is a debtor’s only option. To discuss your debt situation with an experienced Indian River County financial lawyer, call us at 772-589-5500 or fill out our contact form.
Schedule an appointment with an Indian River County bankruptcy lawyer today
Chapter 7 Bankruptcy
In a Chapter 7, the debtor files a petition that lists all his/her assets and debts. Debts are generally categorized as:
• Secured debts (e.g., a home or car).
• Unsecured debts (e.g., credit card debt).
• Priority debts (e.g., federal income taxes and child support).
Debtors who file a Chapter 7 must pass a means test to determine certain qualifications are met and are also required to take an approved debt counseling course before they file for bankruptcy.
Debtors can “exempt” some of their assets from seizure by the trustee. These assets include some equity in a debtor’s home, cars, tools, jewelry, personal possessions, some cash and accounts, and some other assets.
Debtors normally cannot file for another bankruptcy within 10 years of the date of the bankruptcy charge.
Chapter 13 Bankruptcy
Debtors who have secured assets or cannot meet the means test are required to file a Chapter 13 bankruptcy. In a Chapter 13, the debtor prepares a repayment plan to be paid within 3 to 5 years. The plan generally requires that the debtor:
• Pays the arrears on secured debts over the 3-to-5-year period.
• Continues to pay the monthly payments that are due.
• Pays a percentage of the unsecured debts during the length of the repayment period.
Debtors who file a Chapter 13 bankruptcy are entitled to an automatic stay. At the end of the 3-to-5-year repayment period, any unsecured debts remaining are discharged.
Schedule an appointment with an Indian River County bankruptcy lawyer.