Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial long-term consequences warranting careful consideration of the costs and benefits. Being a creation of federal law, bankruptcy will go through federal courts. Accordingly, the process for filing for bankruptcy in Florida is essentially the same as the process anywhere else in the United States. However, particular courts in Alachua, Florida will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Alachua, Florida
There are 2 typical types of consumer bankruptcy in Alachua, Florida: Chapter 7 and 13. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and necessary personal items, like clothing. These assets are not available to creditors.
Once appropriate assets are sold, and the money turned over to the creditors, most remaining debt is excused. However, there are certain types of debt that cannot be excused in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Alachua, Florida.
Chapter 13 Bankruptcy in Alachua, Florida
In Alachua, Florida, chapter 13 is extremely different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 bankruptcy does not absolve debt, it restructures it. This involves a court coming up with an adjusted repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original arrangements that created the debt in the first place. This creates a new payment structure, typically involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Alachua, Florida
Chapter 13 is typically a good option for people who have a stable income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a stable income, Chapter 7 might be more beneficial.
Of course, you should always seek the counsel of an accomplished local Alachua, Florida bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your specific situation.