Basics of Chapter 13—What You Need to Know

While many people are familiar with the term “bankruptcy,” significantly fewer understand what exactly bankruptcy is and what it entails. The information below is intended to help people who are just beginning to explore bankruptcy as a path to financial freedom better understand the things that they are reading. The best way to find out whether bankruptcy is right for you, however, is to discuss the matter with one of the St. Petersburg bankruptcy lawyers at Berkowitz & Myer as soon as you can.

Bankruptcy Petition

A bankruptcy proceeding begins when an individual or a business files a bankruptcy petition, which basically informs the court that the debtor is attempting avail himself or herself (or itself) of the provisions of the Bankruptcy Code. A bankruptcy petition will contain a variety of information, including the debtor’s name, address, the chapter under which the bankruptcy is being filed, the debts that are to be included in the bankruptcy, and the debtor’s income.

The Automatic Stay

The automatic stay is a court order that goes into effect the moment a debtor files for bankruptcy. It prevents creditors from taking actions to collect on a debt, including making phone calls, sending letters, repossessing property, foreclosing on a mortgage, or initiating a lawsuit. In addition, any lawsuits against the debtor will be put on hold for the pendency of the bankruptcy, unless the other party successfully moves to have the stay lifted with regard to a particular lawsuit.


Discharge is generally the most obvious benefit of filing for bankruptcy. When debts are discharged, it means that the debtor is no longer under any obligation to pay them back. Many types of debts are regularly discharged in bankruptcy, including credit card bills, medical debt, unpaid rent, utility bills, certain tax debts, personal loans, business loans, and civil judgments.

Chapter 7

Chapter 7 is the most common type of consumer bankruptcy. It is known as a liquidation bankruptcy because it involves the liquidation of all of a debtor’s non-exempt assets in order to pay back creditors. In many cases, however, Chapter 7 bankruptcies are “zero asset,” meaning that debtors do not have any non-exempt property which can be sold. In cases like these, debtors are able to obtain a discharge without having to give up any of their assets.

Chapter 13

Chapter 13 is another type of consumer bankruptcy. Under Chapter 13, a debtor enters into a court-approved repayment plan that will last anywhere from three to five years. At the conclusion of the bankruptcy, most (if not all) remaining debts will be discharged. Importantly, in Chapter 13, debtors are protected from any collection attempts while they are making payments. For this reason, many individuals use Chapter 13 to keep their homes or other valuable assets while managing their debt.

Call Berkowitz & Myer Today to Schedule a Free Case Evaluation

If you are having trouble paying your bills in spite of earning a regular paycheck, you should speak to an attorney as soon as you can. At Berkowitz & Myer, we will review your financial situation at no cost to you in order to determine whether you may be able to benefit from filing for Chapter 13 or any other type of bankruptcy. To schedule an appointment with one of our experienced St. Petersburg bankruptcy lawyers, call our office today at (727) 344-0123 or send us an email through our online contact form.

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