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 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 Pinellas Park, Florida will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Pinellas Park, Florida
In Pinellas Park, Florida, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This typically includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some types of debt, however, can't be excused in Chapter 7 Bankruptcy in Pinellas Park, Florida. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Pinellas Park, Florida
Chapter 13 Bankruptcy in Pinellas Park, Florida is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct 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 arrangements that gave rise to the debt in the first place. This results in an adjusted 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 Pinellas Park, Florida
This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
Of course, you should always seek the counsel of an experienced local Pinellas Park, 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.