Chapter 7 vs. Chapter 13
In order to file under Chapter 7, your family income cannot exceed the Florida median income for families of a similar size.
If you qualify for Chapter 7, you can discharge unpaid credit cards, medical bills, certain kinds of loans, mortgages if you cannot afford your mortgage or your home is worth far less than you owe, and other forms of unsecured debt.
Bankruptcy Court Info
If your income is too high or your assets exceed your allowances and you wish to retain them, you can file for bankruptcy under Chapter 13. In Chapter 13, your debt will be restructured and allow you to pay off a percentage of what you owe over a 3 or 5-year period.
Once the court approves your bankruptcy plan, there is very little creditors can do to force you to pay late fees, fines, or harass you as long as you stay current in your payments to the trustee.
Home Foreclosure - Chapter 7 Bankruptcy
While filing for Chapter 7 will temporarily halt foreclosure actions, banks can still file for a stay of relief, enabling them to foreclose on your home if it is clear that you will not be able to bring your past-due mortgage current and continue your other payments.
Once your credit card and unsecured debt is discharged, you may have enough disposal income to make your mortgage payment. If you have fallen behind in your payments, most lenders will most likely require you to bring the mortgage current; if you can't do this, they will probably file a foreclosure as soon as your Chapter 7 bankruptcy is closed.
Home Foreclosure - Chapter 13
In a Chapter 13 bankruptcy past-due mortgage payments can be rolled into your repayment plan. However, Chapter 13 does not allow you to reduce your monthly mortgage payment. If you want to reduce your monthly mortgage payment you'll need to negotiate a loan modification. Even so, past-due mortgage payments can be included in your repayment plan so long as you are able to continue making your monthly mortgage payment.
Chapter 13 also allows you to discharge a large percentage of your unsecured debt and the reduction of your total debt load may allow you regain your stability with your mortgage company so you can sleep at night.
Personal Property - Chapter 7 vs. Chapter 13
Another important difference between Chapter 7 and Chapter 13 is how certain items of personal property are handled. In Chapter 7 bankruptcy, the court can seize and liquidate some of your personal property in order to pay your creditors a portion - or all - of what you owe them. Typically, luxury items like LCD TVs, expensive appliances, high-end electronic equipment, or expensive cars are targeted. In Chapter 13 bankruptcy, since you are required to pay a portion of your debt through a repayment plan, you may be able to avoid having your property seized or liquidated.
Chapter 13 - Attorney Representation
Think you can represent yourself in Chapter 13? Forget it. Should we discover that you do not qualify for Chapter 7 or belong in Chapter 13 for other reasons we will refer you to a trusted attorney who is thoughtful, considerate, and well-versed in Chapter 13.