Many people in America have some amount of debt. Whether this is in the form of student loans, credit cards, home, and car loans, etc., too much debt can cause serious financial distress and may result in the need to file bankruptcy. Since everyone is fighting a different economic battle, not all types of bankruptcy are created equal. If you’re currently considering bankruptcy to relieve your financial worries, you must discuss your situation with an accredited bankruptcy lawyer in Naples. Many firms will offer a free consultation where you can not only address your current financial issues, but you will be directed on what type of bankruptcy you should be filing for the most effective outcome.
Call Miller, Hollander & Jeda today to schedule a no-obligation consultation to help you get out of debt and back on with your life.
Continue reading to learn more about the three most common types of bankruptcy, Chapter 7, 11, and 13, including how they work and in what situations they are best suited for and most effective.
Chapter 7 Bankruptcy
What It Is
Chapter 7 is one of the most common forms of bankruptcy filed for individuals. Chapter 7 bankruptcy is considered a liquidation bankruptcy case where a trustee will be appointed to discharge all possible types of unsecured debt. Once your Naples bankruptcy attorney has filed the claim, the trustee will try to sell or liquidate any nonexempt property to pay any outstanding debts. Chapter 7 bankruptcy usually takes anywhere from three to four months to complete from start to finish and is considered to be the most “straightforward” type of bankruptcy when compared to other kinds of bankruptcy.
Who Should File Chapter 7 Bankruptcy
Typically, persons with higher incomes won’t be eligible for Chapter 7. If your income is less than the median of your state or you can pass the means test, you will be eligible. Often, people who file Chapter 7 will keep most of their assets unless they are not exempt by law. To file Chapter 7, you will need to prepare numerous paperwork proving your debts and your eligibility. Many people choose to hire a bankruptcy attorney in Naples to ensure all of their paperwork is correctly filled out.
Chapter 11 Bankruptcy
What It Is
Chapter 11 bankruptcy is most often filed by large corporations, partnerships, and limited liability companies. With this type of bankruptcy, the debtor can restructure their debts in a way that makes them easier to pay while still remaining in business. There is no set time limit for how long a Chapter11 case can take. Some can take a few months, while other cases can take up to two years to complete.
Who Should File Chapter 11 Bankruptcy
Chapter 11 bankruptcy is mostly reserved for businesses and high-income earners with a large amount of debt. However, in some cases, a small business or even an individual may benefit from filing Chapter 11 bankruptcy. Of course, check with an attorney beforehand, and do keep in mind that Chapter 11 is one of the most intricate and confusing types of bankruptcy to file. A bankruptcy attorney in Naples is necessary for businesses filing bankruptcy.
Chapter 13 Bankruptcy
What It Is
Chapter 13 is another common type of bankruptcy that people choose to spread their debt out over a period of time. After the petition to file Chapter 13 has been submitted, there is a meeting of creditors. At this meeting, the time and amount of money that the debtor is required to pay to the creditors will be discussed. Once the amount(s) and time frame have been agreed upon, the debtor will enter into the repayment period, which can last from three to five years.
Who Should File Chapter 13 Bankruptcy
Chapter 13 bankruptcy should be filed if you wish to reorganize your debt in a way that is more manageable and get rid of part of your debt to manage payments better. Additionally, many people file Chapter 13 bankruptcy as opposed to Chapter 7 bankruptcy if they wish to protect their property from being liquidated.
For more information on filing bankruptcy in Naples with an attorney, contact the law office of Miller, Hollander & Jeda today. You have nothing to lose, and only your financial freedom to gain