Introduction:
In this article, I’ll explain the difference between Chapter 7 and Chapter 13 bankruptcy lawyers in Florida. Bankruptcy is a legal process that allows individuals and businesses to eliminate or repay their debts. There are two types of bankruptcy that individuals can file: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is also known as “liquidation bankruptcy” because it involves the sale of the debtor’s non-exempt assets to pay off creditors.
Chapter 13 bankruptcy, on the other hand, is a repayment plan that allows the debtor to keep their assets and pay off their debts over a period of three to five years. Both Chapter 7 and Chapter 13 bankruptcy lawyers in Florida can help individuals and businesses navigate the bankruptcy process and represent them in court. However, the type of lawyer you choose will depend on your specific financial situation and goals.
Differences Between Chapter 7 And Chapter 13 Bankruptcy Lawyers:
- Chapter 7 bankruptcy lawyers focus on liquidating assets
- Chapter 13 bankruptcy lawyers work on payment plans
- Chapter 7 bankruptcy involves selling assets
- Chapter 13 bankruptcy involves paying debts over time
- Chapter 7 bankruptcy is quicker than Chapter 13
- Chapter 13 bankruptcy allows debtors to keep assets
- Chapter 7 bankruptcy requires a means test
- Chapter 13 bankruptcy requires a regular income
- Chapter 7 bankruptcy can result in debt discharge
- Chapter 13 bankruptcy can result in reduced debt payments
Chapter 7 bankruptcy lawyers focus on liquidating assets
Chapter 7 bankruptcy lawyers in Florida focus on liquidating assets in order to pay off creditors. This type of bankruptcy is also known as a “liquidation bankruptcy” because the goal is to sell off non-exempt assets in order to pay off debts. This process is overseen by a bankruptcy trustee, who is responsible for determining which assets can be sold and how the proceeds will be distributed to creditors. Chapter 7 bankruptcy is often chosen by individuals or businesses who do not have the ability to pay off their debts through a repayment plan, such as those with low income or high levels of debt.
Chapter 13 bankruptcy lawyers work on payment plans
Chapter 13 bankruptcy lawyers in Florida focus on creating a repayment plan for the debtor to pay off their debts over a period of time, usually three to five years. This type of bankruptcy is often chosen by individuals who have a steady income and are able to pay off their debts through a structured repayment plan. Chapter 13 bankruptcy allows the debtor to keep their assets, but they must make regular payments to their creditors according to the terms of the repayment plan.
Chapter 7 bankruptcy involves selling assets
Chapter 7 bankruptcy is a type of bankruptcy that is designed to allow individuals and businesses to liquidate their assets in order to pay off their debts. In this process, a bankruptcy trustee is appointed to manage the sale of the debtor’s assets and distribute the proceeds to the creditors. The goal of Chapter 7 bankruptcy is to provide a fresh start for the debtor by eliminating as much of their debt as possible. However, this can be a difficult and emotional process, as the debtor may be required to sell off assets that have sentimental or financial value.
Chapter 13 bankruptcy involves paying debts over time
Chapter 13 bankruptcy is a form of bankruptcy in which an individual is able to pay off their debts over a period of time, rather than having them wiped out immediately. This is often done when an individual has a regular income and is able to make payments, but may not be able to pay off their debts in full at once. In a Chapter 13 bankruptcy, the individual will propose a repayment plan to the bankruptcy court, which outlines how much they will be able to pay each month toward their debts.
The court will then review the plan and, if it is deemed fair and feasible, will approve it. The individual will then be required to make payments according to the plan for a period of three to five years, after which their remaining debts will be discharged.
Chapter 7 bankruptcy is quicker than Chapter 13
Chapter 7 bankruptcy is typically quicker than Chapter 13 bankruptcy, which is a restructuring of debts rather than a complete liquidation. In Chapter 13, the individual creates a repayment plan that is approved by the bankruptcy court and must make payments to their creditors over a period of three to five years.
However, in Chapter 7 bankruptcy, the process can be completed in as little as three to six months. Additionally, Chapter 7 bankruptcy is generally easier to qualify for than Chapter 13, as it does not require the individual to have a steady income or the ability to make regular payments.
Chapter 13 bankruptcy allows debtors to keep assets
Chapter 13 bankruptcy is a type of bankruptcy that allows individuals to keep their assets while repaying their debts over a period of time. This is different from Chapter 7 bankruptcy, which involves selling off assets in order to pay off debts. In Chapter 13 bankruptcy, the debtor creates a repayment plan that outlines how they will pay back their debts over a period of three to five years. This repayment plan must be approved by the bankruptcy court. During this time, the debtor is protected from creditor harassment and wage garnishment.
Chapter 7 bankruptcy requires a means test
Chapter 7 bankruptcy is a type of bankruptcy that allows individuals to have their debts forgiven, or “discharged,” by a court. However, before someone can file for Chapter 7 bankruptcy, they must first pass a means test. The means test is used to determine if someone has the financial means to pay off their debts through a repayment plan, or if they qualify for Chapter 7 bankruptcy. The means test compares an individual’s income to the median income of their state and takes into account their expenses, such as rent, mortgage, and other necessary expenses.
If an individual’s income is above the median income and they have the means to pay off their debts through a repayment plan, they may not qualify for Chapter 7 bankruptcy. However, if their income is below the median income or they do not have the means to pay off their debts through a repayment plan, they may qualify for Chapter 7 bankruptcy.
Chapter 13 bankruptcy requires a regular income
Chapter 13 bankruptcy is a type of bankruptcy that is available to individuals who have a regular income and are able to pay back some or all of their debts over a period of time. This type of bankruptcy is often referred to as a “wage earner’s bankruptcy” because it is designed for people who are able to pay their debts but need some help in restructuring their finances in order to do so.
In order to qualify for Chapter 13 bankruptcy, an individual must have a regular income that is sufficient to meet their monthly expenses and make payments towards their debts. This income can come from a variety of sources, including employment, self-employment, retirement benefits, or other sources of regular income. If an individual does not have a regular income, they may not qualify for Chapter 13 bankruptcy and may need to consider other options such as Chapter 7 bankruptcy.
Chapter 7 bankruptcy can result in debt discharge
Chapter 7 bankruptcy is a type of bankruptcy that allows individuals to have their unsecured debts, such as credit card debt and medical bills, completely discharged. This means that the individual no longer has to pay back these debts and is no longer responsible for them. However, this type of bankruptcy does require the individual to liquidate certain assets, such as their home or car, in order to pay off as much debt as possible. While Chapter 7 bankruptcy can result in debt discharge, it can also have negative consequences, such as damage to credit scores and the potential loss of assets.
Chapter 13 bankruptcy can result in reduced debt payments
Chapter 13 bankruptcy is a type of bankruptcy that allows individuals to restructure their debt and create a repayment plan to pay off their debts over a period of time, typically 3-5 years. One of the benefits of Chapter 13 bankruptcy is that it can result in reduced debt payments. This is because the individual’s debts are reorganized and a repayment plan is created that takes into account the individual’s income and expenses.
The repayment plan is designed to allow the individual to make more manageable monthly payments towards their debts, which may be lower than their original payments. Additionally, certain types of debts, such as unsecured debts like credit card debt, may be partially or fully forgiven in a Chapter 13 bankruptcy.
Conclusion:
I hope this information has helped you understand the differences between Chapter 7 and Chapter 13 bankruptcy lawyers in Florida. To summarize, Chapter 7 bankruptcy lawyers focus on liquidating assets in order to pay off debts, while Chapter 13 bankruptcy lawyers work on payment plans that allow debtors to pay off their debts over time.
Chapter 7 bankruptcy is quicker than Chapter 13, but it may result in the loss of assets. Chapter 13 bankruptcy allows debtors to keep their assets, but it requires a regular income and may take longer to resolve. Both Chapter 7 and Chapter 13 bankruptcy can result in debt discharge or reduced debt payments, but it is important to consider the specific details of your situation and consult with a qualified bankruptcy lawyer to determine the best option for you.