Florida Leon County Chapter 13 Bankruptcy Lawyer
There are two forms of consumer bankruptcy protection: Chapter 7 and Chapter 13. At the law firm of Hathaway & Sprague, P.A., in Tallahassee, Florida, Katherine Hathaway, who is board-certified in consumer bankruptcy by the American Board of Certification, will help you select the best form of debt relief for your situation.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is liquidation bankruptcy. When you file Chapter 7 bankruptcy, you are saying to the court, "Here is my income and here are my expenses. At the end of the month, I don't have enough to pay my debts. Take away my debt and let me keep my exempt property."
Exempt property is different in every state. In Florida, you can keep all equity in your homestead, the cash value of life insurance policies, your 401(k), your IRA, $1,000 in a car, $1,000 in personal belongings. If you don't have homestead property, you can keep $4,000 in personal property.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is like credit counseling on steroids. When you file Chapter 13 bankruptcy, you are saying to the court, "I have some money left over at the end of the month after paying my expenses. However, I don't have enough to pay my debts. Take the extra money I have left over at the end of the month, put it in a pot, and let a trustee appointed by the court pay my creditors out of that pot."
Filing Chapter 13 bankruptcy usually allows you to settle debt for pennies on the dollar. Filing Chapter 13 bankruptcy will also force mortgage companies to accept past due payments over a long period of time — up to five years. You can also refinance vehicles and deal with tax liens when filing Chapter 13 bankruptcy.
Which Type of Bankruptcy Can I File?
To some extent, your ability to choose whether to file Chapter 7 or Chapter 13 bankruptcy is limited by the Bankruptcy Abuse Prevention and Consumer Protection Act. This 2005 law put in place the means test, which tests your ability to repay some of your debts. If you make over the median income, you may be required to file a Chapter 13 bankruptcy instead of Chapter 7. Some people who earn more than the median income can still file Chapter 7 bankruptcy because of they have high expenses such as home mortgage, child support and student loans.
The means test only applies to consumer creditors. If more than 50 percent of your debt is business debt, you can file Chapter 7 even if you earn more than median income. You can also file Chapter 7 while earning more than the median income if you are a military veteran who is more than 30 percent disabled, or you are in active duty in the National Guard.
How Can We Help You?
When you need an experienced Tallahassee Chapter 7 or Chapter 13 bankruptcy attorney, call 850-391-2884 or fill out our contact form to schedule a time to discuss your situation.
