What is the Difference Between Chapter 7 & Chapter 13 Bankruptcy?

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What is the difference between Chapter 7 and Chapter 13 bankruptcy? I’m Steve Kramer. I’m a Florida bankruptcy attorney and we’re going to talk about the difference between Chapter 7 and Chapter 13 bankruptcy. Now Chapter 7 is bankruptcy where you basically liquidate. You wipe away assets and you wipe away debts and at the end of the day you have a clean slate and you don’t owe anybody any money. Now this could be very good for people who don’t have a whole lot in assets but have a whole lot in debt, right? But it could be not the best decision if you do have a lot of assets because then you could wind up losing those assets. So we want to take a look at that because there are exceptions in Florida for certain amount of assets depending upon whether you’re married or single and we want to make sure we take advantage of any opportunity to preserve your assets. Now the other option is Chapter 13 bankruptcy and that is basically a repayment plan. You are not simply wiping away debts, you’re coming up with a plan to repay your debts. And some of them are going to be reduced or eliminated but that is generally the process is, we’re trying to save your assets and reduce your debts by coming up with a payment plan. It can be challenging for people because it’s usually three to five years long and it can be very difficult even if you’re on the ball, even if you do have a good job that’s very reliable and you’ve got a steady paycheck. It can still be challenging for people because it’s a long process and there’s not much room for error. But it can be a very good option at times and I’d be glad to go over the difference between Chapter 7 and Chapter 13 bankruptcy in more detail if you want to sit down with me. And there’s one more caveat I want to bring up, one more way we need to look at this. Our law firm handles bankruptcy but we handle a whole lot more. And bankruptcy is not always the best solution to deal with legal issues. So if you’re dealing with a foreclosure, bankruptcy may or may not be the best option. And if you talk to an attorney that mainly does bankruptcy – or only does bankruptcy – a lot of the times they’re going to push you into that. But that’s not the right answer always. Or maybe you owe just a little bit of debt, right? Well, maybe bankruptcy isn’t the right option. Maybe we can go ahead and settle that debt or negotiate that debt or defense it successfully. There’s always other options and we don’t want to leave anything off the table. We want to go through all the options and let you make the decision on what’s best for you. So if you want to talk about bankruptcy or debts or foreclosure or any of these issues, I’d be glad to sit down with you. Pick up the phone, give me a call. I’m Steve Kramer, thanks for watching.

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