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| Knowing Bankruptcy |
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| Home > Client Services > Bankruptcy Services > Bankruptcy FAQs |
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| Bankruptcy FAQs |
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| Ques |
What is the difference between Chapter 7 and Chapter 13 Bankruptcy? |
| Ans |
In order to file under Chapter 7, your income must be less than the median income in the state of Florida. If you qualify, your unsecured debt - credit cards, medical bills, and certain kinds of loans - will be wiped out. However, the court may sell some of your property in order to pay your creditors a portion of what you owe. Typically, non-essential or luxury items are sold. If you cannot maintain monthly payments on your house, it may be foreclosed upon as well.
In a Chapter 13 bankruptcy, your debt is restructured according to a payment plan agreed to by your creditors. A trustee is appointed by the court, tasked with ensuring you make payments on time and creditors receive what they are owed. In general, people who file under Chapter 13 are required to pay back 80% to 100% of what they owe over the course of 3 or 5 years.
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| Ques |
I need to file for bankruptcy but my Spouse doesn't. Can I file alone?
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| Ans |
Yes, if the debt in question is yours and yours alone. If, for example, you have debt on credit cards that are in your name only, you can file alone. However, since you are married and presumably jointly own a home or other property with your spouse, your spouse's financial information will need to be reported on bankruptcy documents. |
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| Ques |
How to determine whether to file Chapter 7 or Chapter 13 bankruptcy? |
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A Chapter 7 is a liquidation plan. A Chapter 13 is a repayment plan. The determination of whether a case will be a Chapter 7 or Chapter 13 Bankruptcy is based on several different criteria:
- Current monthly income;
- Income in the last six months;
- Other IRS criteria as set out by the bankruptcy code.
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