Many of the current requirements for bankruptcy are laid out in federal law, and the procedure has become more complex since 2005, when the laws were changed. In order to qualify for Chapter 7 (liquidation or discharge of debt) one must be below the “median income” for Florida families. To find out if you are eligible for this form of bankruptcy, contact an Orlando bankruptcy lawyer without delay. Fast action is often necessary when facing imposing financial problems. The legal team at Justin Clark & Associates, PLLC, is professional, experienced and creative, providing insightful and swift actions on behalf of clients. The firm serves Orlando residents and the entire Central Florida area.

Chapter 7 is known as “liquidation” as opposed to “reorganization” of Chapter 13 and other forms of bankruptcy. It is the most common form of bankruptcy because it is a “fresh start.” Most debts are discharged and you can keep certain exempt property. Child support, certain taxes, and student loans are generally not dischargeable. Secured debts are those attached to a piece of property such as a car or home. These items may have to be surrendered. Credit card-debt discharge may be possible, as it is unsecured by any property. Creditors must immediately stop attempting to collect debts, and must contact your attorney instead of you

Chapter 13 is known as “reorganization” or a “wage-earner’s” bankruptcy. It differs from Chapter 7 in that you pay most of your debts over a three- or five-year plan.

• As with Chapter 7, filing protects you from any collection actions by creditors.
• You can keep your home if you show that you can make the payments on it.
• Chapter 13 bankruptcy appears on your credit report for only seven years, as opposed to 10 with Chapter 7.
• It can also be a relief to know you are doing something about your situation, and that in time, you will be back on your feet financially.

In exchange for debt relief and other benefits, you are promising to make regular payments for a three- or five-year period.

As opposed to Chapter 7, which requires that your income not be too high, with Chapter 13 you must prove your income is high enough — high enough to make regular payments over a few years.

If your current debts are very high, the court may reject your case, as you would have trouble paying the debts. Your secured debts cannot exceed $1,010,650, and your unsecured debts cannot be more than $336,900.