How Does Bankruptcy Help?
Bankruptcy is a legal tool provided by Federal law that allows people to discharge debt under Chapter 7 of the Bankruptcy Code or set up a payment plan under Chapter 13.
Chapter 7 bankruptcy is the most common bankruptcy and is often referred to as a “liquidation bankruptcy.” Chapter 7 bankruptcy is used to eliminate, or discharge, primarily unsecured debts such as credit cards or medical bills. Chapter 7 does not eliminate secured debts, such as mortgages and vehicle payments (unless the secured item is surrendered). Chapter 7 will not save a house from foreclosure nor a car from repossession. In Chapter 7, all the debtor’s non‑exempt assets are turned over to a bankruptcy trustee for sale. Sale proceeds, if any, are distributed among the debtor’s unsecured creditors.
Chapter 13 bankruptcy provides an installment plan to repay all or part of debt, but it is not designed to discharge or eliminate most debts. Chapter 13 is used most often to save a house from a foreclosure sale. Debtor’s may use Chapter 13 to “strip” a second mortgage under certain circumstances. Chapter 13 bankruptcy is also useful to eliminate some IRS debt and to establish an affordable plan to pay IRS debt that cannot be eliminated. Chapter 13 bankruptcy is available only to those individuals or joint debtors with regular income. In addition, there are upper limits on the amount of the individual’s secured and unsecured debts in Chapter 13 cases.
If only one spouse is liable on most of the debts, the indebted spouse may file an individual bankruptcy. In most cases, the individual debtor’s bankruptcy will have no adverse effect on the non‑filing spouse. Spouses who have joint debts may file a combined joint bankruptcy petition.
Who is Eligible to File Bankruptcy in an Orlando, Florida Bankruptcy Court?
Any person who is domiciled, owns property, or has a business in the United States may file bankruptcy. To file bankruptcy in Orlando, Florida bankruptcy court, the debtor must live in a county in the Middle District of Florida. These counties include Brevard, Lake, Orange, Osceola, Seminole, and Volusia.
A bankruptcy debtor can claim Florida’s exemptions if the debtor has resided in Florida for the previous two (2) years before filing.. Otherwise, the debtor must use the exemptions of the state where he lived the previous two years or, in some cases, the default set of federal bankruptcy exemptions.
Are Debtors Required to Have an Attorney To File Bankruptcy?
Bankruptcy law does not require that you hire an Orlando bankruptcy attorney to prepare a bankruptcy petition or to represent you in Florida’s middle bankruptcy district. Debtors who are able and willing to do new things on their own, or debtors who cannot afford an Orlando bankruptcy attorney, can buy forms on the internet to file their own bankruptcy petition and schedules.
However, bankruptcy is a complicated area of the law, and the bankruptcy law gives no special treatment or excuse to debtors who file their own petition with mistakes or omissions.
How an Orlando Bankruptcy Attorney Assists the Debtor
An Orlando bankruptcy attorney should assist the bankruptcy debtor with the following legal work and advice:
- Explain bankruptcy procedures and costs;
- Examine the debtor’s assets, debts, and income in order to determine the risk and benefits of the debtor’s bankruptcy;
- Discuss with the debtor any likely creditor challenges or objections to the bankruptcy;
- Prepare the bankruptcy petition. The petition includes all information about the debtor’s debts, income, and your assets.
- File “suggestions of bankruptcy” to stop ongoing collection litigation against the debtor.
- Accompany the bankruptcy debtor to a required meeting with a bankruptcy trustee;
- Respond to any issues raised by the bankruptcy trustee;
- Advise the debtor about any challenges raised by a creditor;
- Help the debtor plan financially for life after the bankruptcy discharge;
- Advise debtor about options for handling creditor violations of the bankruptcy discharge.
What to Do Next
We help clients in central Florida with filing Chapter 7 bankruptcy. We can take of your entire case from start to finish. Give us a call today for a free consultation.