What are the Differences Between Chapter 7 & Chapter 13

Florida Chapter 7 and Chapter 13 Bankruptcy Lawyer

Offices in Coral Springs and Plantation

Filing for bankruptcy can be an intimidating process. When considering bankruptcy, it is important that you thoroughly understand your options. At the Coral Springs and Plantation, Florida, law office of Michelle Armstrong, P.A., we represent clients exploring the possibility of filing for bankruptcy. Our firm is fluent in the language of the state and federal bankruptcy laws and can help you understand the main differences between Chapter 13 and Chapter 7 bankruptcy.

Contact the law offices of Michelle Armstrong, P.A. today at 954-282-6090 to begin the process of securing a debt free tomorrow.

What are the differences between Chapter 7 and Chapter 13?

Chapter 7

In Chapter 7 bankruptcy cases, one must "qualify" under the revised bankruptcy laws, based upon how their annual gross income compares to the median in their state, for their size household. However, even if your income exceeds the median, many clients still qualify because they still can pass the "means test."

• Most clients can keep all of their assets because they are protected by exemptions.
• If there are assets, not protected by exemptions, they can be turned over to the court for liquidation, or they can be settled in a manner that allows the client to keep the property. This requires a legal analysis by the attorney to determine if all property owned falls within the exemptions.
• The Chapter 7 debtors typically receive a discharge of their debts in about three months from the date the case is filed with the court.

Chapter 13

Chapter 13 bankruptcy cases are filed for various reasons.

1. If a client does not pass the means test, the case is filed as a Chapter 13 case and a payment plan is proposed to the court for approval, designating a once a month payment to the bankruptcy trustee for a 3 - 5 year period. The payment amount is based upon a formula; it is not necessarily payment in full of all debt; sometimes the payment is as low as $50.00/month. The balance of the debt is discharged, or "wiped out" after all plan payments have been made.

2. If the client has assets that he/she doesn't want to lose in Chapter 7, the client can keep all property in ja Chapter 13 bankruptcy, even if that property doesn't qualify as exempt. But the value of that property, above all liens, must be paid out to the unsecured creditors during the payment plan period.

3. IF the client has fallen behind on mortgage or car payments (or other secured debts the payment plan allows the client to catch up on these payments, and retain the secured property.

4. IF a client wants to pay something to his/her creditors and can afford to, but doesn't want increased interest problems, or late fees, or creditor harassment, a bankruptcy payment plan can be a great solution because it is under court supervision.

Myths about Filing for Bankruptcy

• Bankruptcy is no longer available after the law changed in 2005.
• You must pay your debts in full if you file bankruptcy
• You will have to give up your home, car, household contents, etc.
• You can't protect your home from foreclosure
• You will never get credit again
• You must pass a test before filing
• You must go for hours of credit counseling.
• You can keep a few credit cards.
• You don't have to list the debt if someone else makes the payments.
• You don't have to list everything you own.
• You can get rid of child support and alimony
• You can transfer your property away, and then file bankruptcy

Contact Us

At the Coral Springs and Plantation, Florida law offices of Michelle Armstrong, P.A. we provide personal service, thorough information regarding filing for bankruptcy and options for seeking a fresh start. Contact us today for a free initial consultation to discuss filing for bankruptcy protection.

We are a federally designated Debt Relief Agency under the United States bankruptcy laws. We help people find solutions to their debt problems, including, where appropriate, assisting them with filing for bankruptcy relief under the United States Bankruptcy Code.