Types of Bankruptcy
When considering bankruptcy, it’s vital to understand the different types of “chapters” available. Each bankruptcy chapter has its own rules, processes, and ideal candidates. Here’s a quick overview of them:
Chapter 7: Liquidation Bankruptcy
Chapter 7 is often called “liquidation bankruptcy.” This option is for those who can’t repay their debts. To qualify, debtors are required to pass a means test which compares their income to the median income in their state.
Benefits:
More information is available on the United States Courts website under Chapter 7.
Chapter 13: Repayment Plan Bankruptcy
Chapter 13 is also known as a “wage earner’s plan.” This type allows individuals with regular income to create a repayment plan for part or all of their debts.
Eligibility Criteria:
- Regular source of income.
- Debts should be within specified limits.
Advantages:
- Helps stop foreclosure on your home; according to US Courts, “Individuals may use a chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition.”
- Allows you to reorganize and pay debts over three to five years.
More information is available on the United States Courts website under Chapter 13.
Chapter 11: Reorganization Bankruptcy
Chapter 11, often considered “reorganization bankruptcy,” is primarily for businesses but can be used by individuals with substantial debts.
Key Points:
- The debtor usually stays “in possession” and can keep operating their business.
- Involves creating a reorganization plan to pay creditors.
Benefits:
- Allows the business to continue operations.
- Can restructure debts for better repayment terms.
More information is available on the United States Courts website under Chapter 11.
The 341 Meeting of Creditors
This 341 Meeting of Creditors is a crucial part of the bankruptcy process. It allows creditors to question the debtor’s financial situation and the proposed repayment plan under oath.
Cornell Law School defines it as “Also referred to as the creditors meeting, its name comes from section 341 of the Bankruptcy Code. The purpose of a 341 meeting is to examine the debtor’s financial position and to confirm the facts stated by the debtor in the bankruptcy filing. Therefore, the debtor must attend the 341 meeting, and answer the questions made by the presiding officer under penalty of perjury.”
The Importance of Legal Guidance
Choosing the correct type of bankruptcy is complex. Legal guidance helps ensure you make a choice that can help and benefit you. Navigating bankruptcy can be daunting. Our Hialeah bankruptcy attorneys are here to help you understand your options and achieve a favorable outcome.
How Stiberman Law, P.A. Can Help
Are you facing overwhelming debt and considering bankruptcy? Our team at Stiberman Law, P.A. in Hialeah, Florida, is here to assist you. We have experience working with personal bankruptcy, focusing on Chapter 7 and Chapter 13 cases, as shown on our website under Areas of Practice.
Here’s how we can help you:
Personalized Consultations
We offer personalized consultations and are ready to explore all debt relief options. This helps us craft a defense tailored to your specific needs.
Complete Legal Representation
Our experienced bankruptcy lawyers provide legal representation from start to finish. Whether it’s filing paperwork or representing you in bankruptcy court, we are committed to guiding you through every step.
Client Commitment
We are dedicated to your success and financial relief. We understand the complexities and stresses of filing for bankruptcy and want to provide you with a fresh start.
Understanding Bankruptcy
Declaring bankruptcy sometimes means a clean slate but also comes with significant consequences and can be confusing, so we’re prepared to answer any questions. We recommend article we published titled What Happens When You File for Bankruptcy.
Stiberman Law, P.A. ensures you make informed decisions throughout this process. Let us help you achieve debt relief and regain control of your financial future.
Contact Stiberman Law, P.A.
If you need a Hialeah bankruptcy attorney, our firm, Stiberman Law, P.A., is here to help you. We have offices in Hollywood, Coral Gables, Fort Lauderdale, South Date, and West Palm Beach. Our team has experience working in all the bankruptcy procedures we detailed above: Chapter 7, Chapter 11, and Chapter 13; please refer to our Practice Areas for more information, including reviews and client testimonials. We’re also prepared to help you handle self-employment income in bankruptcy and emergency filings.
For example, our law firm was able to file a Chapter 7 Bankruptcy for a Hialeah client who had an estimate of $45K in Credit card debt and several evictions. Through Chapter 7 Bankruptcy, not only were we able to help our client eliminate the credit card debt and debts arising from evictions, but also put an end to all the demand letters and threatening lawsuits from her prior landlords and creditors.
We encourage you to contact us for a free consultation to discuss your financial situation. We can provide guidance and support whether you are dealing with debt consolidation, foreclosure, wage garnishment, student loans, or other financial difficulties.
Let us help you navigate the complexities of bankruptcy and find a solution that works for you.
