There are two primary types of financial relief that consumers may receive under bankruptcy law. Chapters 7 and 13 bankruptcy have their individual features that you need to understand at the outset of the process. Both can be forms of debt relief for Orlando households. To learn more about how the bankruptcy process works in Orlando and whether either or both of these options may work for you, speak to a bankruptcy lawyer at Consumer Law Attorneys.
The Main Differences Explained
Here are some of the main differences between Chapter 7 and Chapter 13 bankruptcy, of which you need to be aware:
- Chapter 7 bankruptcy may lead to the entire forgiveness of certain unsecured debts, while Chapter 13 is a restructuring that allows you breathing room and more time to pay your debts
- You get to keep your property in a Chapter 13 bankruptcy, while you must surrender non-exempt property to the trustee in Chapter 7
- Most regular earners are able to qualify for Chapter 13 bankruptcy, while only those who earn less than a certain amount may file for Chapter 7
- Chapter 13 bankruptcy can take up to five years for the process to be complete, but a Chapter 7 bankruptcy usually takes no longer than six months.
Pros and Cons for Orlando Residents
Deciding whether to file for bankruptcy and which type of protection you are seeking are both momentous financial decisions in your life. There are definitely factors that may work in your favor for each type of bankruptcy:
- You gain more breathing room because there is an automatic stay, which freezes creditor efforts to collect from you
- You may have debts discharged at the conclusion of bankruptcy
- You can begin to rebuild your credit once you emerge from bankruptcy
However, you should also be aware of the drawbacks of bankruptcy, which include:
- You may either have to surrender some of your property or continue to pay off your debts
- Your credit will take a significant hit for a lengthy period of time
- There is a stigma to declaring bankruptcy, and it is a matter of public record
You may decide that getting creditor calls to stop and obtaining a fresh financial start far outweigh the cons of declaring bankruptcy. We can help you make the decision about whether declaring bankruptcy is the right choice in your situation.
Which Option Is Right for You?
The option that is right for you may depend on your circumstances before you have filed for bankruptcy. First, you may not even have a choice about which type of bankruptcy you can file. Florida law imposes a means test for those who are hoping to qualify for Chapter 7 bankruptcy. If you make more than a certain amount of money, you may have to file for Chapter 13 bankruptcy.
If you can qualify for Chapter 7 bankruptcy, you have to decide if the tradeoffs weigh in your favor. You may have to surrender some of your personal property, but you can also make a cleaner break with your past difficulties and do it in a more expeditious manner.
Chapter 13 bankruptcy may not have as drastic an impact on your life, and you can get financially healthy in a more gradual manner without many of the severe impacts. You still get protection from your creditors, but you also need to closely follow your reorganization plan for an extended period of time.
Consulting a Bankruptcy Lawyer Before You File
Always get legal help from an experienced lawyer to learn more about the bankruptcy process. You must know the ins and outs of each type of bankruptcy and what you can expect before you choose which one is right for you. In addition, there are certain dos and don’ts that you need to understand for each type of bankruptcy before you file.
Consulting with an Orlando bankruptcy lawyer can give you peace of mind when you are going through a difficult time. Both knowing everything that you can about the process and realizing that you have someone in your corner can go a long way toward easing what has likely been a significant burden for you.
Contact a Bankruptcy Lawyer in Orlando
To learn more about whether bankruptcy is the right option for you, and which type you should file for, speak to an Orlando bankruptcy lawyer at Consumer Law Attorneys. We can evaluate your situation and explain what you may be able to do to get out from under the mountain of debt that is significantly impacting your life. You can discuss debt relief in Orlando by messaging us online or by calling us today at (871) 241-2200 to schedule a free initial consultation.
