Nobody ever dreams about filing for bankruptcy, but that doesn’t mean it’s an entirely bad thing. Bankruptcy can provide you with a fresh start and can help you get your head back above water after years of sinking under crushing debt. At the Law Offices of Patrick L. Cordero, we know that bankruptcy can be a positive solution for our clients. Here’s why it’s not the end, but the beginning: the positives of bankruptcy.
Bankruptcy may not be the dream scenario for you, but it isn’t the black hole of despair it is often described as. Bankruptcy is your chance to draw a line under your financial troubles and start anew. Depending on your situation, you may not even face too much of a hit to your credit rating.
Chapter 7 Bankruptcy
If you have few assets, a poor credit score, and mostly unsecured debt, it may be a good idea to file for Chapter 7 bankruptcy. This is called a “liquidation bankruptcy” because your personal assets are liquidated, and the proceeds are then given to your creditors. However, if you do not have any assets, you won’t owe anything to your creditors. Assets such as equity in a home or a vehicle needed to get to work may be exempted in your case.
Benefits of Chapter 7 Bankruptcy
Chapter 7 bankruptcy protection provides some key benefits to those with unsecured debts and few assets. These include:
- A fresh financial start.
- You can keep the property and income you acquire in the future, as this is not part of the bankruptcy filing.
- Unlike Chapter 13 bankruptcy, there are no limitations to the amount of debt you can claim protection from.
- No repayment plan required under law.
- You can discharge your debts much more quickly than through other forms of bankruptcy.
Chapter 13 Bankruptcy
If most of your debt is secured, you have decent credit, and assets that you want to protect, Chapter 13 bankruptcy may be best for you. In a Chapter 13 case, your debts are reorganized and repaid over a period of three or five years. During the repayment period, creditors can’t move to foreclose on your home or repossess your car.
Benefits of Chapter 13 Bankruptcy
One of the best aspects of Chapter 13 bankruptcy is that you don’t have to lose your personal assets. In Chapter 7 bankruptcy, physical assets are considered nonexempt, meaning the individual in charge of liquidating assets to pay your unsecured debts would take over these assets and sell them to settle what’s owed.
In a Chapter 13 bankruptcy, on the other hand, a debtor must pass a “best interest test,” which means that you must pay your creditors what they would have been entitled to under a Chapter 7 bankruptcy. This means, if you would have owed $50,000 in a Chapter 7 bankruptcy, to settle a Chapter 13 bankruptcy you must repay the $50,000 over the period of the bankruptcy agreement to meet the terms of the best interest test. All the while, your house, your cars, and other assets are safe.
Some other benefits of a Chapter 13 bankruptcy include:
- An end to harassing phone calls from creditors.
- The chance to begin rebuilding your credit.
- And most importantly – the chance to get out from under a mountain of debt!
Work with the Largest Bankruptcy Lawyer in Florida
At the Law Offices of Patrick L. Cordero, we are proud to be the largest bankruptcy law firm in the entire state of Florida. Offering personalized attention to every client, we understand that your situation is unique. If you are considering applying for bankruptcy protection, regardless of the type, having an experienced attorney on your side can go a long way.Trust the Lawyer of the Decade, the Minority Lawyer of the Year, and the Largest Bankruptcy Firm in Florida and we’ll work to get you the best financial outcome possible. Trust in the experienced and passionate legal team at The Law Offices of Patrick L. Cordero to help you. Call for a free, no-risk consultation today at (305) 445-4855.