Financial concerns are stressful. If you are overwhelmed and have made the difficult decision to seek a fresh financial start, it is crucial to seek the legal advice and experience of a bankruptcy attorney. Bankruptcy is a complex area of the law and an attorney can help guide you through the process.

Filing for Bankruptcy Can Stop Your Creditors

Bankruptcy is not for everyone and it certainly will not automatically “erase” all of your debts. However, if you are behind in mortgage payments, your wages are being garnished, or you are overwhelmed by creditor collection tactics, such as calls and letters, bankruptcy may be an option to consider.

Just as soon as you file bankruptcy, you can find relief from creditors by way of the automatic stay. The automatic stay will halt collection activities by most creditors and provide protection from lawsuits, garnishments and foreclosures.

Types of Bankruptcy

Bankruptcy is governed by federal law under the United States Bankruptcy Code. Individuals may file under Chapter 7 or Chapter 13 of the code depending on the amount of debt owed and whether there is available income to enable repayment of the debt.

Chapter 7

Chapter 7 bankruptcy is also known as “liquidation bankruptcy.” Filing under this chapter will completely discharge much of your unsecured debt.

In order to be eligible to file under Chapter 7, however, you must pass the “means test.” The means test is a calculation that will determine if your monthly disposable income is great enough to allow you to repay your debts.

If your monthly income is below the median income level in Florida, you will automatically pass the means test and be eligible to file under Chapter 7.

If you have enough disposable income to repay a portion of your debt, however, you may not pass the means test and, therefore, would not be eligible to file under Chapter 7.

Chapter 13

This type of bankruptcy is available to those that are able to meet the requirements of a plan to repay all or part of their debt over a three to five year period.

In order to qualify for a Chapter 13 bankruptcy, you must show that your debt is within certain limitations as set forth by the bankruptcy code, and that you have a job and enough income to repay a portion of your debt. Chapter 13 is also an option to those who do not qualify under the Chapter 7 means test.

Calling an Attorney Can Help

Because the United States Bankruptcy Code and the rules that govern bankruptcies, the Federal Rules of Bankruptcy Procedure, can be very complex and confusing, hiring an attorney is imperative. Filing correctly, and under the proper Chapter, is essential to ensuring your financial future and avoiding unintended legal consequences. Call Attorney Neil Morales at the Law Offices of Neil Morales to schedule a consultation and to discuss your financial concerns and goals for the future.