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Bankruptcy Explained by an Orlando Foreclosure Defense Lawyer

What is bankruptcy?

Before you file for bankruptcy, it is important that you understand the types of bankruptcy that are available, the consequences, and possible alternatives. In its most simple definition, bankruptcy is the legal status of a person or company who can no longer pay off debt. Generally, filing for bankruptcy is considered as a last resort for people drowning in debt, and don't see any other way out.

Types of Consumer Bankruptcy

There are many types of bankruptcy, including consumer bankruptcy, commercial bankruptcy, and even municipality bankruptcy. There are two types of consumer bankruptcies, Chapter 7 and Chapter 13 bankruptcy. There are specific qualifications that one must fill when filing for bankruptcy, which are explained below.

Chapter 7 Bankruptcy
Chapter 7 bankruptcies are the most common type of bankruptcy proceeding, and are usually filed if you cannot afford to make any payments to your creditors. Under Chapter 7 bankruptcy, your debts are discharged (also known as liquidation), and you are no longer responsible for them. Liquidation generally involves the court-appointment of a trustee who can collect your property, sell it, and distribute the proceeds to repay as much as possible to your creditors. Of course, there are always exemptions to this rule that vary state to state, which we are able to discuss with you.

Filing for Chapter 7 creates a permanent court order from creditors attempting to collect debts from you; however, some debts cannot be discharged. Fortunately, you are allowed to keep key assets and property, as well as your right to receive pension, Social Security, unemployment, and welfare.

Chapter 13 Bankruptcy
Chapter 13 bankruptcies are the second most common type of consumer bankruptcy proceeding, and are usually filed by people who have some source of consistent income and can make small or partial repayments to creditors. People usually choose to file for Chapter 13 as a strategy to save their home, avoid foreclosure, or are "wage-earners" who are able to afford partial payments to creditors.

Filing for Chapter 13 allows you to keep your assets. Chapter 13 allows you to create a unique three-to-five year repayment plan, based on your source and amount of income and the Bankruptcy's Code requirements. Upon completing your customized plan successfully, your debts are erased. With an attorney, however, you can work to determine if a settlement is in your best financial interest.

There are many differences between Chapter 7 and Chapter 13 bankruptcy. While Chapter 13 allows debtors to remain in possession of assets, Chapter 7 does not. Whereas Chapter 7 gives immediate discharge of debts, Chapter 13 requires debtors to continuously pay amounts based on an anticipated guestimate of future income. Chapter 7 and Chapter 13 bankruptcies each have their pros and cons, and without legal guidance, you may not know what is best suited for your situation. In either case, Chapter 7 and 13 do have one important similarity: They may not have as big of an effect on your credit score as you think! Your credit report can recover, and a skilled Orlando foreclosure defense attorney from our firm can help you strategically navigate the road to a strong financial future.

Consequences of Filing for Bankruptcy

If you are considering filing for bankruptcy, the consequences of doing so has probably already come across your mind. It is true that bankruptcy can wipe away a big portion of debt, if not all of it. Collection agencies are no longer hounding you for money, and you can finally rest easy that your payments are finally manageable again.

Other potential consequences could be long lasting, and if you aren't careful, completely life altering. Banks and credit unions could drop or close your accounts depending on your situation. Friends or family members who may have acted as co-signers on your loan or home could be hounded for outstanding payments. Your credit score could even be affected for 10 years.

The most important thing to remember is that there is light at the end of the tunnel. If you take careful steps, consult a knowledgeable lawyer, and take proactive measures to rebuild your credit score, financial freedom is completely attainable. Remember, you have a right to enjoy your life free of financial strain, but you must be willing to take the steps to get there.

Bankruptcy Prevention and Consumer Protection Act

The passage of the Bankruptcy Prevention and Consumer Protection Act in 2005 has made huge reforms in bankruptcy law, but also made filing for bankruptcy a bit more challenging. Because of the passage of this act, it is important to know what the current qualifications and limitations are to each Chapter of bankruptcy. At Perez Conrique Law, we can do a bankruptcy analysis during your fee consultation that can help you determine whether Bankruptcy is right for you. You can also find out about alternatives to bankruptcy, you may want to consider including debt negotiation, debt relief, or other options such as foreclosure defense or short sales.

Retain an Orlando Bankruptcy Attorney from Perez Conrique Law

In the current economic situation, it is not at all unusual for us to be asked of bankruptcy help, and you should not feel humiliated or embarrassed for asking for guidance. Oftentimes, it is the proactive steps that can save a person's future financial success.

Our attorneys are highly experienced, and can provide legal counsel that is specific to your financial situation. At Perez Conrique Law, we give options to our clients that can move them towards financial freedom and success. Do not leave your financial future in the hands of fraudulent debt negotiators or predatory lenders. We have more than 20 years of experience, and understand the impact that debt can have on you and your family’s. If you are tired of harassing phone calls and want relief from your debtconsult an Orlando Debt Relief lawyer. Our legal counsel can guide you to a . Contact Perez Conrique Law or fill out a free case evaluation form.

Perez Conrique Law - Orlando Foreclosure Attorney
Located at 746 North Magnolia Avenue, Orlando, FL 32803. View Map
Phone: (407) 749-1591 | Local Phone: (407) 545-4400.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.