There are two common forms of bankruptcy, Chapters 7 and 13. Chapter 13 allows individuals and the owners of small businesses to repay their outstanding debt over time and keep their assets; Chapter 7 on the other hand requires that you dispose of your assets to pay debt. If you are contemplating bankruptcy a bankruptcy lawyer in Tampa is the legal professional best suited to advise you on which approach suits your situation better.
The differences between chapter 13 and 7:
The principal purpose of Chapter 13 bankruptcy in Tampa is to allow the debtor to retain assets that otherwise would have to be identified and turned over for liquidation under Chapter 7 rules. In the majority of cases anyone who files for either Chapter 7 or 13 can keep their primary residence and vehicle. Any rental properties, antiques, collectables, etc owned by the debtor will have to be turned over if the decision is to file for Chapter 7.
Chapter 7 is often the choice for those with very few assets of any value, once discharged the bankrupt is given an opportunity to start over with a clean slate. Under Chapter 13 rules the bankrupt must repay a portion of his or her debt but assets do not have to be disposed of as part of the process. There are advantages to filing for Chapter 13 protection.
Who can file for chapter 13?
The only person who is allowed to file is an individual who has incurred debt on the date of filing of:
- Not more than $250,000 in unsecured debt
- Not more than $750,000 in secured debt
- All of these debts must be for a fixed amount and be free of conditions
What are the benefits of filing for chapter 13?
A bankruptcy lawyer in Tampa will explain that chapter 13 protects a debtor from any and all collection efforts, lets the person keep personal property and all real estate. In return the debtor is given the opportunity to repay all his debts through a debt reduction action plan. As the individuals debt will be repaid having filed for bankruptcy will remain on your credit history for a shorter period of time than chapter 7 which can be as long as ten years.
The time frame for debt repayment is all determined by the amount you can afford to pay after all necessary living expenses have been taken into account. These expenses include insurance premiums, mortgage payments, etc. The typical time frame that the court is willing to accept is between three and five year
