What exactly is bankruptcy?
Bankruptcy is a federal court process designed to help people eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as liquidation or work-outs of debts by individuals. Upon a court declaration of bankruptcy, a person or firm surrenders assets to a court-appointed trustee, and is relieved from the payment of previous debts.
Will filing for bankruptcy protect me from creditors’ efforts to collect what I owe?
When you file bankruptcy, an automatic stay goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 Bankruptcy
You ask the bankruptcy court to discharge most of the debts you owe. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection, sell it, and distribute the proceeds to your creditors.
Chapter 13 Bankruptcy
You file a repayment plan with the bankruptcy court to pay back your debts over time. The amount you’ll have to repay depends on how much you earn, the amount and types of debt you owe, and how much property you own.
Which is right for me?
If your income falls under certain levels, you may qualify for a Chapter 7 bankruptcy. In Chapter 7, you do not have to pay back the debt you chose to give up in your bankruptcy case. If you have assets you want to protect or make too much money, Chapter 13 bankruptcy may be right for you.
What might I lose if I file for bankruptcy?
If you are concerned about liquidation and losing your home, car, heirlooms or other assets, please understand that Florida bankruptcy exemption laws do provide for individuals to keep a vast majority (if not all) of their property.
Will bankruptcy stop a foreclosure?
Yes and No. A home is an asset usually secured by a deed of trust. The mortgage company is entitled apply to the court for relief from the automatic stay, the order preventing creditor action by virtue of the bankruptcy.
Depending upon several factors, you may be able to prolong a foreclosure until you have received your discharge from bankruptcy. Usually, to keep a home that is in foreclosure you will have to make a deal with the Mortgage Company. Therefore, you will still need to work something out with the Mortgage Company to repay the past due.