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Answers to Some Frequently Asked Questions About Consumer Bankruptcy


When you are struggling with debt and considering your options, you may be wondering whether consumer bankruptcy is the right choice for you. If you do some brief research into personal bankruptcy, you will learn that there are multiple types of bankruptcy for consumers and that there are eligibility requirements. Sorting out the information you need can be complicated. While you should always speak with an experienced Orlando bankruptcy attorney about your case given the complexity of U.S. bankruptcy law, the following are some answers to frequently asked questions to provide you with additional information.

Should I File for Chapter 7 or Chapter 13 Bankruptcy? 

The answer to this question depends on several different factors. First, what are your aims in filing for bankruptcy? Are you trying to get a fresh start and to wipe out debt as soon as possible (in which case Chapter 7 would be best for you), or are you trying to get back on track with mortgage payments and to prevent foreclosure (in which case Chapter 13 bankruptcy would be your best bet)? Then, once you consider what your goal in filing for bankruptcy, you will need to consider issues of eligibility for Chapter 7 and Chapter 13 bankruptcy.

How Do I Become Eligible for Chapter 7 and Chapter 13 Bankruptcy? 

Eligibility for Chapter 7 bankruptcy depends upon whether you can pass the “means test.” This is a test that considers your income to determine whether allowing you to file for Chapter 7 bankruptcy would be abusive. In other words, if a person earns too much money, they may be ineligible for Chapter 7 bankruptcy. When a person wants to file for Chapter 7 but is ineligible, they are often eligible for Chapter 13 bankruptcy instead.

Whether you want to file for Chapter 13 bankruptcy initially or are considering this option because you cannot pass the means test, the eligibility for Chapter 13 bankruptcy is not based on the means test but depends upon the amount of debt you have. If you have more than $419,275 in unsecured debts or more than $1,257,850 in secured debts, you cannot file for Chapter 13 bankruptcy. However, Chapter 11 bankruptcy may be an option for you.

Can Bankruptcy Prevent My House from Going Into Foreclosure? 

Chapter 13 bankruptcy is the only kind of bankruptcy that can allow you to stop a foreclosure and get back on track with mortgage payments and other debts. The automatic stay—which applies to all consumer bankruptcies—prevents the servicer from moving forward with foreclosure proceedings, while your Chapter 13 bankruptcy case will allow you to develop a repayment plan through which you can catch up on mortgage payments. In this way, Chapter 13 bankruptcy can also stop a repossession.

Will All of My Debts Be Discharged? 

Certain debts are more difficult to discharge than others (like student loan debt, for example), while some types of debt are non-dischargeable. For example, family support debt and certain types of tax debt are non-dischargeable. If you have questions, you should ask a bankruptcy lawyer in Orlando.

See Advice from an Orlando Bankruptcy Attorney 

Are you considering consumer bankruptcy? An experienced Orlando bankruptcy lawyer can assist you. Contact Anderson & Ferrin today to speak with one of the advocates at our firm.


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