|BANKRUPTCY – DEBT RELIEF
Financial problems can happen to anyone.
The most common form of bankruptcy for consumers is a Chapter 7 bankruptcy. This form of bankruptcy gives debtors a “fresh start” by
discharging debts. Debts that are discharged do not have to be paid back. Filing for chapter 7 will require a debtor to list all of their
debts, income and assets in order to determine what property the debtor can keep. Debtors are allowed to keep certain exempt
property such as a minimum of household goods and interest in one automobile. Property in excess of this exempt property may have
to be turned over to the bankruptcy trustee to be liquidated to satisfy claims of creditors. However, most chapter 7 bankruptcy cases
involve debtors who do not have any non-exempt property that could be used to satisfy creditors. Once a chapter 7 case is successfully
The debt owed on a mortgage may be discharged through a chapter 7 bankruptcy (although the debtor will have to give up the home).
However, in some cases, it is possible to keep a home that is in foreclosure by getting current on the payments and agreeing to keep
paying for this debt in the future.
CHAPTER 13 BANKRUPTCY
People who make too much money or own too many assets to qualify for a Chapter 7 bankruptcy still have an opportunity to reorganize
If you have a regular source of income, you can file bankruptcy under Chapter 13 of the Bankruptcy Code. Often called the wage earner’
s plan, Chapter 13 bankruptcy allows you to pay off all or a portion of your debts within three to five years. You are not required to pay
back all of your debt! The bankruptcy laws control the amount you must repay.
Under Chapter 13 bankruptcy, the money you owe on your mortgage, vehicle loans, student loans, credit card debts and other
unsecured debts is consolidated into one reasonable, interest-free payment. While you are in a Chapter 13 debt repayment plan, your
creditors cannot attempt to collect from you directly. That means no more harassing phone calls, wage garnishments or
Many people do not realize that the payments they are asked to make under a Chapter 13 bankruptcy are based on an amount they can
afford. Reasonable living expenses, child support payments, alimony and other payments you are ordered to make are deducted from
your income available for debt repayment. You are not required to pay all of your debt.
Chapter 13 provides the chance for people to save their homes from foreclosure. By filing under this chapter, individuals can stop
foreclosure proceedings. Chapter 13 bankruptcy will also stop your car from being repossessed by the finance company.
In many Chapter 13 cases, once the reorganization is complete your remaining debts may be discharged. The end result for these
debts is similar to a Chapter 7 Bankruptcy – your obligation to pay is terminated and you can focus on rebuilding your financial future.
Corporations, Limited Liability companies and Partnerships are legal entities separate from their shareholders or partners. The
Entities can file Chapter 7 Bankruptcy or Chapter 11 Bankruptcy as a business. An individual who owns a business as a sole
proprietor must file bankruptcy as an individual, not as a business. This is because the assets and liabilities of the business are really
just one form of assets and liabilities of the individual proprietor. The individual owner may file Chapter 7, Chapter 11 or Chapter 13
Bankruptcy Frequently Asked Questions
Did you know that filing bankruptcy may:
Stop your creditors from calling and harassing you
Stop all debt-related lawsuits against you
Stop foreclosure actions
Stop wage garnishment
Give you a fresh start
Help you reestablish excellent credit
In 2005 Congress passed a comprehensive bankruptcy reform bill called the Bankruptcy Abuse
Prevention & Consumer Protection Act (BAPCPA). This law tightened the requirements necessary to
obtain a discharge of debts through a chapter 7 bankruptcy.
|** This web site does not contain or constitute legal advice. Contents are for informational purposes only.
Consult with an attorney for any legal concerns. **
© 2009 Roland H. Acosta & Associates, P.A.
399 Carolina Avenue, Suite 210
Winter Park, FL, 32789
|ROLAND H. ACOSTA
& ASSOCIATES, P.A.
399 Carolina Avenue, Suite 210
Winter Park, FL 32789
Telephone: (407) 644-2531
Facsimile: (407) 628-9289