Bankruptcy can give a debtor relief from debt that is too deep to repay but only bankruptcy attorneys determine which bankruptcy to file Chapter 7, Chapter 11, or Chapter 13.
Winter Park bankruptcy attorneys Eric Lanigan and Roddy Lanigan find clients overwhelmed by debt that includes credit cards, is caused by divorce, medical debt, homes under water and foreclosure.
When this occurs bankruptcy Chapter 7, Chapter 11 or Chapter 13 are possible relief options.
What Bankruptcy Can Do
Bankruptcy can stop creditors from harassing you and allow you to take a new look at your financial picture to find a plan that will allow you to start over. Bankruptcy Chapter 13 may be the plan to help to deplete the amount owed by a debtor. But many people do not know much about this process and how to sort through the legalities, contractual obligations and laws.
This is where the Lanigans will help you. You should always hire an attorney to handle your bankruptcy and decide whether Chapter 7, Chapter 13 or if your business is involved, Chapter 11 bankruptcy is an option for you.
Video Explains Difference Between Chapter 13 and Chapter 7
Watch this video on the Lanigan’s YouTube channel to see what the differences are between Chapter 7 Bankruptcy Chapter 13 Bankruptcy Filing – Florida.
Do-it-yourselfers can help themselves by downloading free forms for filing bankruptcy but have no clue the danger they can be in. A lot depends on how complicated the person’s financial affairs are and how well he or she understands business law. The lawyer’s responsibility is to know the law and advise the person on how best to handle the overwhelming debt.
Making the decision to file bankruptcy is a serious step and a person who files needs to take into account all the ramifications of declaring insolvency. It will affect a borrowers’ credit rating and his ability to borrow money in the future. Therefore, finding free forms for filing bankruptcy should be a last resort.
But sometimes people find themselves with situations out of their control that brings on debt such as the loss of a job, an injury in which the borrower cannot work, or piled-up medical debts.
Mortgage Workouts Are An Option
In these cases, different types of bankruptcy may be the only solution. Some people have found that one method of avoiding bankruptcy is negotiation with lenders to work out individual payments and doing what’s called a mortgage workout.
Some creditors are not willing to negotiate with borrowers. For the person who decides to continue with the plan bankruptcy can be another option. Most people should consult an experienced Orlando bankruptcy attorney like Eric Lanigan or Roddy Lanigan to help them through the process in the courts.
For individuals who have a bankruptcy petition dismissed in court, creditors are then free once again to take action against the debtor. This can occur when a bankruptcy is filed by an individual not represented in court. This would be especially difficult is the owner is facing a foreclosure or a repossession. The correct petition in court by the Lanigans will stop these actions by creditors and allow the debtor to repay the back payments over time.
Four Different Kinds of Bankruptcy
There are four different types of bankruptcy–chapters 7, 11, 12, and 13. Chapter 11 applies to businesses, but can apply to someone who has an extremely large debt, and Chapter 12 usually applies to farmers.
Most individuals file under Chapter 7 and Chapter 13. With Chapter 7, the filer should have few assets and mostly unsecured debt. To qualify, the filer takes a Means Test to determine whether a filer has the right monthly income to qualify. This means that the family must have an average income that is equal to or less than the median income in his state.
If a person has equity in a home or other property, he shouldn’t file for Chapter 7 because his assets may be liquidated to pay the creditors. Under Chapter 13, the filer can keep his property and files a plan to repay the debt over a period of several years; therefore, the assets are not sold to pay for the debt, as what often happens in Chapter 7.
For both types of legal actions, the debtor is assigned a counselor or trustee who helps make up the plan to pay off the debt. Once the plan is made, the court either approves the plan or orders changes to the plan. Once the court has approved the plan, a debtor must follow through with it until all has been completed.
In Chapter 13, the debtor is assigned a trustee to help manage the accounts and see to it that the borrower follows through with what he has promised to do about his finances. In both cases, the debtor is protected from creditors’ harassment.
It is essential to understand the different types of bankruptcy because some are not appropriate legal action for certain individuals.
2005 Bankruptcy Act Changed Rules for Filing
On October 17, 2005, a new law was put into effect called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which prevents people with high incomes to file with Chapter 7. Instead, the applicant must file with Chapter 13. In Chapter 7, the debtor’s property may be sold to raise some money for the creditors, therefore people who own property will want to avoid this action.
One exception to this rule is when a homeowner’s house is homesteaded. That means that no one can touch the home, not even those who want to recoup their losses in a bankruptcy. This is what happens in Florida.
Different types of bankruptcy will solve some financial problems due to too much debt. Consult with Winter Park attorney Eric Lanigan or Roddy Lanigan. Watch their videos to learn first about what you’ll be hearing about to quickly get a look at what you’ll be facing.