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What Type of Bankruptcy is Right for Me?

As a St. Petersburg bankruptcy attorney, I get many clients who come into my office with their finances upside down and they are just looking for a way to get their head above water. Filing for bankruptcy is a great tool to get a fresh financial start when you feel that you are hitting rock bottom. The main question that I always here from my clients is "what type of bankruptcy should I file for?" This is simply because there are three main types of bankruptcy to choose from, there is Chapter 7, Chapter 11 and Chapter 13. Everyone's financial situation is different and some need a more drastic form of debt relief than others. In order to find out which type of bankruptcy would be best for you, you first need to understand the benefits and draw backs of each and what they are designed to do. Speak with a St. Petersburg bankruptcy attorney from our firm today to discuss the specifics of your bankruptcy case.

The most common type of bankruptcy petition that is filed is Chapter 7. That is because business owners and individuals can file under this type of bankruptcy as long as they are eligible. This type of bankruptcy is popular because it discharges debt in the shortest amount of time and absolves nearly all types of unsecured debt. With Chapter 7 bankruptcy, you could experience debt discharge in as short as 80-100 days from the day that you file your petition. Chapter 7 is also referred to as the "liquidation bankruptcy" because it does leave individuals more susceptible to losing their assets during the bankruptcy process. However, there are certain exemptions and assets that are innately protected under bankruptcy law.

From first look, Chapter 7 seems like the most desirable type of bankruptcy, but the catch is that not everyone is eligible to file for it. In order to seek relief through Chapter 7, you must pass the means test which looks to see if your level of income is higher or lower than the standard median. If your income is too high, don't worry, you can still seek relief by filing for Chapter 13.

If you are unable to make your current monthly payments and can't seem to pay your bills on time, Chapter 13 can help make the payments more manageable so you can catch up. With Chapter 13 individuals are able to negotiate a new, more affordable repayment plan that is spanned over 36-40 months. For individuals who want to reorganize their debts for their mortgage, car loan or overdue taxes, Chapter 13 is a great option. There is one catch with Chapter 13 that all debtors should be aware of, individuals cannot enjoy discharge unless they complete their repayment plan to its completion. Another important note is that Chapter 13 is not for businesses, but it is a viable alternative for individuals who do not qualify for Chapter 7.

The third type of bankruptcy is Chapter 11 which businesses and individuals can file for. Chapter 13 has both secured and unsecured debt limits, so for some Chapter 11 is the only other available option. Chapter 11 is also a wise tool for businesses that are at risk of foreclosure, fighting off a lawsuit, or trying to put a stop to a collection action. It is very important that you speak with an experienced bankruptcy attorney prior to filing so that you can make sure you are pursuing the best option and most affordable option for your case.

If you would like to learn more about the various types of bankruptcy or you have further questions, please do not hesitate to contact one of our St. Petersburg bankruptcy lawyers. Here at Dion R. Hancock, P.A. we offer a free consultation, so call today at (727) 475-4518.

Categories: Bankruptcy

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.