This is the most common type of bankruptcy, and is often suitable if the main problem is credit card or medical debts. In Florida individuals are usually limited to keeping $1,000 of personal property as well as $1,000 in equity in a motor vehicle. Under a statute taking effect 1 July 2007, if the individual filing does not claim a homestead exemption, the $1,000 exemption for personal property is increased to $5,000.
This bankruptcy will usually not eliminate debts to the IRS (though it might if the taxes are more than three years old), and will usually not reinstate mortgages that are not current when the case is filed. If you have a new model car that is paid off or has substantial equity, the Chapter 7 may not work for you.
It usually eliminates credit card debts (though you should not have any recent charges when you file the case) and medical bills.
This is the reorganization bankruptcy for corporations. This type of bankruptcy is much more complicated, and expensive than the others. Given an appropriate situation, we may handle this type of case, or may refer you to another attorney.
This is similar to Chapter 13 but designed for family farmers or ranchers. It allows some more flexibility for those who do not have monthly income, but just get lump sum income once or twice a year. It also provides more flexibility for mortgages or other debts that include a balloon provision (requiring the entire balance to be paid off in a lump sum amount).
This is usually the case to file if you are substantially behind on recent taxes or if the IRS has a tax lien on substantial property. If there is a foreclosure on your home, but you can afford the regular mortgage payment plus something to catch up the back payments, this type of case will often enable you to keep the house so long as you file before any foreclosure sale. If there is a balloon payment on the mortgage coming due soon, (a large lump sum payment due under the original terms of the mortgage), you need to discuss that with the attorney as special provisions usually have to be made regarding that. This bankruptcy may also save you money if you owe much more on your car or truck than it is worth, or if you have a very high interest rate.
If you run your own business, this will usually allow you to keep the business, and keep running it while reorganizing the debts. Often, credit cards and medical bills, as well as other debts that do not have any liens on property, are repaid at 20% of the balance due when the case is filed. Payments continue for 3-5 years.
Corporations cannot file Chapter 13, but unincorporated businesses usually can (depending on the amount of total debt).
Many clients behind on their payments experience creditors violating the Fair Debt Collections Act. Violations under this law include calling friends or neighbors about a debt you owe, lying about actions they can or will take to collect the debt, lying about your rights, using foul language, or calling too many times in one day, to mention a few.
The general presumption is that student loan debt cannot be eliminated in bankruptcy. As usual, it is more complicated than that. The first question is what is a student loan for purposes of bankruptcy? Two federal appellate courts have now ruled that private student loans may not be student loans for bankruptcy purposes, and may be eliminated in bankruptcy. The test for whether private student loans can be eliminated, per these courts (Massachusetts, covering New Hampshire, Puerto Rico, Maine, Rhode Island, and Massachusetts; and Louisiana, covering Louisiana, Mississippi, and Texas) is whether the loan is a ‘qualified education loan’ as defined in the tax code, or if it was made, insured, or guaranteed by a governmental unit or nonprofit institution. If neither of these conditions are met, it is not a student loan for bankruptcy purposes (at least in the above states) and can be eliminated in bankruptcy.