Bankruptcy: Important Things to Know About Chapters 7 and 13

Bankruptcy may be intimidating for those who are not familiar with the process. But with the help of a bankruptcy attorney in St. Petersburg, you can manage your debt and get back on the right foot. People who pursue bankruptcy often do so because filing can:

  • Protect your home from foreclosure
  • Stop debt collection attempts
  • Prevent utility companies from cutting off power and water
  • Give you more time to readjust your debts

Chapter 7 discharges your debt, but this does not include student loan debt. There are unique circumstances that exist for student loan debt, but largely, you are responsible for paying it off. If the debtor or their dependents are under undue hardship, they may be able to seek a discharge for their student loan debt.

Whether you file for chapter 7 or 13, you must fill out and complete all necessary forms. Everyone who files for bankruptcy must complete the necessary forms for the federal government, which may include:

  • Voluntary Petition for Individuals Filing for Bankruptcy
  • Summary of Your Assets and Liabilities and Certain Statistical Information
  • Statement of Current Monthly Income
  • Chapter 7 Means Test Calculation
  • Chapter 13 Calculation of Your Disposable Income

Florida Bankruptcy

In Florida, residents cannot use federal exemptions, and must instead use the state’s exemptions. Potential exemptions may include:

  • Homestead exemptions
  • Certain personal property up to $1,000
  • Up to $1,000 in motor vehicle equity
  • Up to $4,000 in personal property if not using the homestead exemption
  • Certain pension and retirement funds like 401ks and Simple IRAs

Your St. Petersburg bankruptcy attorney can go over the various exemptions available and help you determine which ones are applicable to your situation.

What You Need to Know When Filing for Bankruptcy

When you file, you must submit a repayment plan detailing your debts like child support, vehicle loans, mortgages, and tax liens and how you plan to repay them. A bankruptcy attorney in St. Petersburg can help you devise a plan that allows you to comfortably pay your debts. Unsecured debts, like medical bills and credit cards, must be less than $336,900 and secured debt, like mortgages, must be less than $1,010,650.

Filing for bankruptcy will leave a lasting impact on your credit; it will stay on your record for ten years. This can influence your ability to loan a car, rent a home, get a credit card, and more.

To speak with a bankruptcy attorney in the St. Petersburg area, trust Berkowitz & Myer. Call us today at (727) 344-0123 or contact us online to schedule a no-cost consultation.

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

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.

Basics of Chapter 13—What You Need to Know

Bankruptcy Attorney St. Petersburg

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

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.

Could Your End-of-Year Bonus Cause You to File for Chapter 13 Bankruptcy?

For many people who are struggling financially, the holidays can be a stressful time. Some households rely on credit cards and others simply ignore financial issues until the new year begins. In either situation, early in the year, you may be wondering whether it is the right time to file for bankruptcy. The answer to this question will vary from case to case and the best way to decide the right timing for your bankruptcy filing is to discuss your specific situation with a skilled bankruptcy law firm.Bankruptcy Lawyer St. Petersburg

Income and the Means Test

There are many factors that can determine when the right time to file bankruptcy may be. One of these is how much income you have recently earned. This is important to determine which type of bankruptcy you will be able to file. For example, in order to qualify for Chapter 7 bankruptcy, you will need to pass something called the means test.

You cannot qualify for a Chapter 7 bankruptcy if the court decides you have enough income to pay your debts. The means test takes into account your income, your debts, and expenses and if you have too much disposable income, you will have to file for Chapter 13 bankruptcy instead of Chapter 7. Chapter 13 bankruptcy requires you to make payments toward your debts for up to five years before you receive a discharge, so Chapter 7 is often—but not always—a preferable option.

Your attorney can examine the income that will need to be reported on the means test to advise you whether you may be eligible for Chapter 7 or you will have to file under Chapter 13. There are many types of income will be considered by the court for the means test, including:

  • Basic wages, tips, and overtime
  • Commissions and bonuses
  • Social Security benefits
  • Rents and interest payments
  • Unemployment, disability, or workers’ compensation benefits
  • Retirement payments
  • Child support
  • Any other payments you receive to put toward household expenses

One important type of income to consider is a bonus from work, as many people receive these bonuses at the end of the year during the holiday season.

The means test considers income received during the past six months (excluding the calendar month in which you file). This means that if you received a bonus in the past six months (such as an end-of-the-year bonus), it could increase your income enough to disqualify you from Chapter 7 bankruptcy. This also goes for any cash gifts from your employer, clients, or other work-related sources.

A St. Petersburg Bankruptcy Law Firm Can Help You

You should always have an attorney who can evaluate all of the circumstances of your financial situation including income, debts, taxes, and more. Your attorney can then advise you of the best timing for your bankruptcy case. In some situations, Chapter 13 bankruptcy may be beneficial and/or necessary and the law firm of Berkowitz & Myer is here to help you. Please write to us using our online contact form or call our office at (727) 344-0123 to schedule your free consultation today.

Chapter 13 FAQ

Bankruptcy Law Firm St. Petersburg

If you are considering bankruptcy, you probably have many questions—and you should fully understand your options and the implications of each type of bankruptcy available to you. Frequently asked questions about Chapter 13 bankruptcy follow below.

What Is Chapter 13 bankruptcy?

Chapter 13 bankruptcy is commonly called reorganization bankruptcy because the process will reorganize your debts and help you pay off what you can, prioritizing certain creditors. At the end of the process, the bankruptcy court can discharge any remaining qualified debts that you have not paid off.

What Is the Difference Between Chapter 13 and Chapter 7 Bankruptcy?

In a Chapter 7 bankruptcy, the court takes your nonexempt property to pay your creditors in exchange for a discharge of debts. In a Chapter 13 case, you do not have to relinquish any property but instead must enter into a repayment plan for three to five years before you can get a discharge.

What Type of Repayment Plan Will the Court Require?

Once the court reorganizes your debts, the bankruptcy trustee assigned to your case will set a manageable monthly payment based on your income and expenses. An experienced attorney can help ensure that the payment is right for your situation. When you make a single monthly payment to the court, the trustee will use the payment to pay down your debts in priority order.

When Is Chapter 13 Bankruptcy Right for Me?

While the idea of a discharge without a repayment plan may sound preferable, Chapter 13 may prove a better choice for you under certain circumstances, including when:

  • You have too much income to qualify for Chapter 7 bankruptcy.
  • You have nonexempt property that you want to protect.
  • You have mortgage arrears, past due auto loans, or other secured debts that a Chapter 7 bankruptcy cannot address. (In a Chapter 13 case, you can include your secured arrears in your repayment plan, which can help you keep your house or car.)

The best way to know whether Chapter 13 is the right choice for you is to evaluate your situation with an experienced bankruptcy attorney.

Can Bankruptcy Discharge All of My Remaining Debts?

If you successfully complete your repayment plan, bankruptcy will discharge most of your debts, except the following:

  • Unpaid child support or alimony
  • Many tax debts
  • Criminal fines or restitution
  • Fraud-related debts
  • Most student loans
  • Judgments arising from malicious or willful conduct
  • Debts not included in the repayment plan
  • Certain installment debts

Even though Chapter 13 bankruptcy may not discharge certain debts, it can relieve you of many others and free up funds to stay on track with any remaining accounts.

Contact a St. Petersburg Bankruptcy Law Firm to Discuss Your Options Today

If you want to learn more about Chapter 13 bankruptcy, please contact the law office of Berkowitz & Myer in St. Petersburg. Our skilled bankruptcy attorney will consult with you for free, so please call (727) 344-0123 or contact us online for more information about the possible benefits of bankruptcy.

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