Bankruptcy in Sarasota Florida - Cynthia Riddell, Esq.

Chapter 7 and Chapter 13 Personal and Small Business Bankruptcies

Chapter 7 or “straight bankruptcy” allows you to get a “fresh start,” free from most debts in exchange for the sale of property that is not protected by either state or federal law. The proceeds from this sale are used to pay your creditors. You can protect MOST of the things you will need to get this fresh start, which may include a home, a vehicle, certain personal property, and many retirement accounts, for instance.

A Chapter 13 or “wage earner” bankruptcy is a repayment plan that allows you to keep more of your property and may discharge debts you will not be able to in a Chapter 7 bankruptcy case (such as back child support, alimony arrears, overdue taxes, and past due student loans). Instead of a sale of your property to pay your creditors, you make monthly payments for a period of 3 to 5 years, after which you will be free from most debts and deemed current on long term obligations (such as a mortgage where you had arrears before your bankruptcy, but wanted to keep your home). In addition, you may be able to keep more of your secured assets and pay less for them due to the “cram down” and “lien stripping” provisions of Chapter 13.