Types of Bankruptcy
There are three main types of bankruptcy, referred to by their chapter number in the federal Bankruptcy Code. If you are interested in filing for bankruptcy, you will need to understand the different types and evaluate your financial situation against them. Please contact me for help with this. As a Tampa bankruptcy attorney, I can provide the guidance and representation necessary to accomplish any type of Florida bankruptcy.
Chapter 7, a liquidating bankruptcy, is the most common type of bankruptcy case which is available to individuals, businesses, and corporations. In this type of case, the debtor turns over to the trustee appointed to him all of his nonexempt property, if any exists. In return, the debtor receives a discharge of his debts as long as he pays the filing fee, is eligible for the discharge, and obeys the orders and rules of the court. The trustee sells the property and pays off the creditors with the proceeds, according to priorities set up by law. The benefit of Chapter 7 is that the debtor is freed from any future obligations on his discharged debts.
Chapter 11
Chapter 11 is a reorganization type of bankruptcy generally used by businesses. In a Chapter 11, the creditors of the business are prohibited from taking legal action against the debtor for a temporary period while the debtor works out a reorganization plan. The plan may contain ways to pay off all or part of the debts owed and taxes may be dealt with through the plan. The creditors vote on the plan and the court must approve it.
Chapter 13 bankruptcies may be used by individuals who have fallen behind in their mortgage or car loans and want to catch up while still retaining their assets. In this case, the debtor is allowed to repay all or a portion of his debts under the supervision and protection of the court. The debtor submits to the court a plan for repayment over a period of time ranging from 3 to 5 years. If the court approves the plan, most creditors will not be allowed to try to collect their claims.
For more information about how you can file for a Florida bankruptcy,
contact the Tampa Bankruptcy Attorney
at the firm.
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