Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant long-term consequences warranting careful consideration of the costs and benefits. Being a product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in Florida is basically the same as the procedure anywhere else in the United States. However, individual courts in Lee County, Florida will have individual rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Lee County, Florida
In Lee County, Florida, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This usually includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Lee County, Florida is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Lee County, Florida
Chapter 13 Bankruptcy in Lee County, Florida differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the agreements that gave rise to the debt in the first place. This results in a new payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in Lee County, Florida
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your individual situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
In any case, it would be a good idea to consult a local bankruptcy attorney in Lee County, Florida. Your attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).