Many of the current requirements for bankruptcy are laid out in federal law, and the procedure has become more complex since 2005, when the laws were changed. In order to qualify for Chapter 7 (liquidation or discharge of debt) one must be below the "median income" for Florida families. To find out if you are eligible for this form of bankruptcy, contact an Orlando bankruptcy lawyer without delay. Fast action is often necessary when facing imposing financial problems. The legal team at Gregory & Clark, PLLC, is professional, experienced and creative, providing insightful and swift actions on behalf of clients. The firm serves Orlando residents and the entire Central Florida area. Contact Us »

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Chapter 13 bankruptcy is often a possible solution for clients who are currently working, either as an employee or are self-employed, and who wish to pay off their outstanding obligations without losing certain assets or properties. This form of bankruptcy can quickly bring relief. Initially, as with any bankruptcy filing, an "automatic stay" stops all collection, foreclosure and repossession actions. This allows the time to work out solutions while the bankruptcy moves forward. The legal team at Gregory & Clark, PLLC, has much experience in assisting clients with loan modifications and foreclosure defense, and can negotiate on the client's behalf during this window of time. After the bankruptcy becomes final, the client has the opportunity to pay off past obligations over a number of years, which resolves the matter in an effective and less-stressful manner.

No matter what your current financial situation is, it is likely that a bankruptcy lawyer from Gregory & Clark, PLLC, can assist you with insightful and rapid financial strategies, including possible alternatives to bankruptcy. It is critical to act quickly, as when you are facing a home foreclosure or other urgent financial issue as there becomes a point after which it is too late.

You may or may not have a choice between filing personal bankruptcy under Chapter 7 or Chapter 13. Contact our firm to determine your options.

Chapter 7 is most common, and people seem to prefer it, as it is a "fresh start." Others prefer Chapter 13 because you don't necessarily have to give up any property at all. You are also more likely to keep your home. Contact Us »

Benefits of Chapter 13

Chapter 13 is known as "reorganization" or a "wage-earner's" bankruptcy. It differs from Chapter 7 in that you pay most of your debts over a three- or five-year plan.

• As with Chapter 7, filing protects you from any collection actions by creditors.

• You can keep your home if you show that you can make the payments on it.

• Chapter 13 bankruptcy appears on your credit report for only seven years, as opposed to 10 with Chapter 7.

• It can also be a relief to know you are doing something about your situation, and that in time, you will be back on your feet financially.

In exchange for debt relief and other benefits, you are promising to make regular payments for a three- or five-year period.

Qualifying Under Chapter 13

As opposed to Chapter 7, which requires that your income not be too high, with Chapter 13 you must prove your income is high enough — high enough to make regular payments over a few years.

If your current debts are very high, the court may reject your case, as you would have trouble paying the debts. Your secured debts cannot exceed $1,010,650, and your unsecured debts cannot be more than $336,900.

If you have been worried about your finances for a long time, and even struggling to pay bills and debts, you will be greatly relieved to discharge most of your debt and start over. This is the advantage of Chapter 7, versus Chapter 13.
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Chapter 7 is known as "liquidation" as opposed to "reorganization" of Chapter 13 and other forms of bankruptcy. It is the most common form of bankruptcy because it is a "fresh start." Most debts are discharged and you can keep certain exempt property. Child support, certain taxes, and student loans are generally not dischargable. Secured debts are those attached to a piece of property such as a car or home. These items may have to be surrendered. Credit card-debt discharge may be possible, as it is unsecured by any property. Creditors must immediately stop attempting to collect debts, and must contact your attorney instead of you.

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It has become somewhat more complicated — and slightly more difficult — to qualify, since the law was changed in 2005. Your household income must be under the median income for a household of the same size in the state in which you live. Contact us for assistance, and to see if you qualify under the means test.

Another disadvantage is that a Chapter 7 bankruptcy stays on your credit report for 10 years, as opposed to seven years for Chapter 13. You must undergo budget and credit counseling prior to filing.

Bankruptcy is meant to give people a fresh start if they have gotten too far in debt to get out. But student loans have been non-dischargable, that is, even if you declare bankruptcy, these loans are still owed. Contact Us »

It may seem unfair. After all, gambling debts owed to a casino can be eligible for debt discharge. But a well-meaning individual who tried to improve him or herself is stuck, even though he cannot find a job.

Recent proposed legislation in Congress may change this. Contact our firm for the latest law and guidance with your bankruptcy.

The reasons for non-dischargability are not clear. If it were easy to get out of student loans, it would be much more common, and loan-guarantee programs might no longer be feasible. But even private loans are treated the same as government-guaranteed loans.

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Undue Hardship

In rare circumstances involving "undue hardship," student loans are discharged in bankruptcy. Generally, you must prove that if you were forced to repay your loans, you could not maintain a minimal standard of living, that this would not just be short-term, and that you made good-faith efforts to pay.

An example would be someone severely injured, preventing them from performing in a job that would pay enough. If you think you may face this situation, and for the most current information on bankruptcy and publicly guaranteed or private loans, contact a lawyer at Gregory & Clark, PLLC.