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Choosing between Chapter 7 and Chapter 13 bankruptcy
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Choosing between Chapter 7 and Chapter 13 bankruptcy

On Behalf of | Feb 22, 2021 | Uncategorized

There are many unpredictable events that occur in people’s lives in Florida. Some of these unexpected events can be very detrimental and cause serious issues in people’s lives. This could be a serious injury or illness or potentially a lost job. When these events occur people may find themselves in a very difficult financial situation as they move forward.

When people find themselves in this situation often times it results in accumulating debt. This could be the medical bills that people incur or credit cards that people use to pay for their expenses when their income is no longer there. Over time the debt can become overwhelming and people may wonder if they will ever rid themselves of the debt.

People could file for bankruptcy, but there are different types of bankruptcy. Two of the main ones for individuals are Chapter 7 and Chapter 13 bankruptcy. Each has different benefits and people need to choose the right one based on their circumstances.

Chapter 7

When people file for Chapter 7 bankruptcy, the main benefit is that at the end of the bankruptcy most of their unsecured debt is discharged. This means that they will no longer be liable for the debt and creditors cannot try to collect these debts. However, people may need to liquidate their property to pay off debt. There are exemptions that people can keep though. Also, there are certain types of debt that cannot be discharged and people will still be liable for them.

Chapter 13

Through this process people still are required to pay most of their debt through a repayment plan. However, this process also allows people to keep their property and they do not need to liquidate it to pay their debt. Also, if there are still debts after the repayment plan is complete, the remaining debt could be discharged and this discharge can include more types of debt than Chapter 7.

There are many people in Florida who may have debt that is controlling their lives. People in this situation do have options for achieving a fresh start through bankruptcy. Choosing the right option is important though and consulting with experienced attorneys could be beneficial.