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Bankruptcy Overview

Chapter 7 Bankruptcy and Chapter 13 Bankruptcy In Brief


Why File for Bankruptcy?

A new start for the honest debtor is the stated purpose for bankruptcy.  Income is far less stable than debt. My experience has taught me that optimism about the future is a primary cause of bankruptcy. But there is nothing wrong with optimism, even if things didn’t happen as expected.  If you can benefit from a fresh start, call today to begin a life without creditor calls, late payment fees, wage garnishments, foreclosure proceedings, and most importantly, the stress that accompanies financial instability. We are here to facilitate the process for you.


What is a Means Test?

A Means Test applies to consumer debt resolution / bankruptcies and is used only when most of an individual’s debt is consumer debt. It looks at the means of an individual to determine if filing a Chapter 7 bankruptcy would be an abuse of the bankruptcy laws. A means test is also used to help determine how much would have to be paid to unsecured creditors in a Chapter 13 bankruptcy.


What is an Automatic Stay?

The first usual benefit of filing a bankruptcy petition under either Chapter 7 or Chapter 13 is the law which requires an automatic stay, which stops most collection efforts while the bankruptcy case is pending. As the name implies, the stay is automatic and comes into existence immediately upon filing the petition. The automatic stay is temporary. Assuming there hasn’t been any prior court orders or bankruptcy filings affecting the stay, and that the bankruptcy filing is valid, then an automatic stay usually stops:

  • Creditor Phone Calls
  • Garnishments
  • Lawsuits
  • Foreclosure
  • Repossession Efforts
  • Acts to Perfect a Lien
  • Driver’s License Suspension Under Florida Financial Responsibility Law

The stay provides protection from most creditors during the bankruptcy process. If and when a discharge is entered, the stay is replaced by a permanent injunction against attempts to collect debts that have been discharged.



Who is the Trustee?

If a Chapter 7 bankruptcy or Chapter 13 bankruptcy petition is filed, a Trustee will be assigned to the case. An important function of a Trustee is to administer the bankruptcy estate. In a Chapter 7 bankruptcy, this means liquidating the non-exempt assets, if any, and paying creditors their share with the funds from liquidation. In a Chapter 13 bankruptcy, the Trustee collects the Chapter 13 Plan payments and distributes the funds to the creditors pursuant to a confirmed plan.

The Trustees do have other functions and may file various motions in the case.  The Trustees working the cases in the Tampa Division are, in the opinion of our bankruptcy attorney, good people who attain to be fair and unbiased. But they have a job to do, and their view of what should be done may be different from your view or the lawyer’s view.  Consequently, a Trustee in bankruptcy can be like a built-in adversary. An experienced bankruptcy attorney is usually able to resolve issues with the Trustee, and more importantly, prevent issues from arising in the first place.



How Does a Discharge Work?

A discharge in bankruptcy terminates the legal obligation to pay the debts that are discharged. It also prevents creditors from making any attempts to collect discharged debts. However, liens are not discharged.  It is only the personal obligation to pay that may be discharged.



Can I File Chapter 7 Bankruptcy or Chapter 13 Bankruptcy Myself?

If you are considering arranging your own affairs or filing a bankruptcy petition on your own behalf, it is still advisable to consult with an bankruptcy attorney that deals with bankruptcy issues on a regular basis. We offer free initial phone consultations.  Mistakes can be costly and may exceed the fees charged by a bankruptcy lawyer. What may seem to be good bankruptcy planning by one may be called bankruptcy fraud by another.


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