Filing for bankruptcy is a big step for people, but it can offer much-needed debt relief. At Carmona Law, our Kissimmee bankruptcy lawyers have helped individuals and married couples save their homes from foreclosure, we have helped clients erase thousands in credit card and medical debt, and we have helped countless individuals gain the financial fresh start they so desperately needed. If you're contemplating bankruptcy, we encourage you to read the common questions and answers about bankruptcy below.
For more information or to meet with one of our Kissimmee bankruptcy attorneys in person, please feel free to contact our office directly.
With a Chapter 7, a bankruptcy trustee takes over the debtor's assets, reduces them to cash and makes distributions to creditors, subject to the debtor's "exempt property." Since most Chapter 7 cases don't have nonexempt assets, many Chapter 7s are no-asset cases, meaning the debtor gets to keep everything. Under a Chapter 7, certain unsecured debts are discharged, or otherwise wiped out and the debtor is no longer responsible for paying discharged debts.
Chapter 13 is known as the "wage earner's bankruptcy" because it's for people with a regular source of income. In a Chapter 13, the debtor pays all or a portion of his or her debts over a 3 to 5 year time period. The debtor makes a monthly payment to the trustee, who distributes the money to the creditors. The debtor does not pay the creditors directly.
Determining which bankruptcy is right for you will depend upon your income, the amount and type of debt, and whether or not you want to save a home from foreclosure. If you have a lot of credit card debt and you're unemployed, a Chapter 7 is probably the best option. But, if you have a good paying job but simply can't afford all of your debt, you may have to file a Chapter 13.
The bankruptcy discharge releases the debtor from personal liability from certain types of debts. Once a debt is discharged, the debtor is no longer legally required to pay the debt.
The automatic stay is a court injunction that prohibits creditors from commencing or continuing any debt collection activities. This includes phone calls, collection letters, wage garnishments, foreclosures, and lawsuits. The automatic stay goes into effect the moment the Chapter 7 or Chapter 13 bankruptcy petition is filed with the court and lasts until the discharge.
While a Chapter 7 can discharge many types of debts, it cannot discharge all debts. Some of the debts that cannot be discharged in a Chapter 7 include: spousal support, child support, court-ordered fines, student loans, victim restitution, and recent taxes.
Bankruptcy stays on your credit report for ten years; however, this doesn't mean it ruins your credit for that long. When debtors follow a few simple credit rebuilding strategies, they can obtain a credit score in the 700s within a couple of years following a bankruptcy discharge.
At Carmona Law, we're in the business of helping people. If filing for bankruptcy will get the creditors off your back, and give you the stress-relief you need, we would be glad to guide you through the process. We invite you to contact our bilingual law firm today to request your risk-free case evaluation with one of our friendly and knowledgeable bankruptcy attorneys.
We have offices located all throughout Florida, but we also represent individuals in Colombia and Puerto Rico.