For many people, “Bankruptcy” is the scariest word in business. No-one wants to be labeled as bankrupt and have to deal with the financial ramifications that come with it. With that said, there are many misconceptions about what bankruptcy is and what it means to file for chapter 13 bankruptcy. We’ll look at what bankruptcy is and what it isn’t, and see how a Chapter 13 lawyer Orlando Fl can help you if you need to file for bankruptcy protection.
Let’s start by clearly defining bankruptcy. Bankruptcy is a legal term for a state in which an individual or company cannot pay the outstanding debts they have incurred. In the U.S. Federal Courts oversee bankruptcy proceedings to provide legal protection and resolution for people who file bankruptcy.
The Difference Between Chapter 7 and Chapter 13
Two of the most common types of bankruptcy are known as Chapter 7 and Chapter 13. A Chapter 13 lawyer Orlando Fl will help you with “reorganizational” bankruptcy, another term for Chapter 13. The simple difference is the amount of money or assets the debtor has when bankruptcy is filed. If they have the revenue and/or means to pay back some of what is owed, their debt is reorganized under Chapter 13. If they cannot pay back at all, Chapter 7 is used. In Chapter 7, assets are liquidated, and the debt is more or less wiped out, though the long-term credit implications are far worse in this scenario than in Chapter 13.
The Bankruptcy Process
Generally, when bankruptcy is filed, the court will notify creditors, who must either cease collection efforts until reorganization is complete or file a motion protesting. A Chapter 13 lawyer Orlando Fl will help as an intermediary to the court in restructuring your debt.
Once a payment plan has been designated, if you are able to make the monthly payments, you should experience no legal complications.
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