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Law Offices of Carol M. Galloway, P.A. Jacksonville Bankruptcy Lawyer
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Palm Coast Bankruptcy Lawyer

Debt is a part of life but sometimes, it can become unmanageable and result in lawsuits, wage garnishments, and more. If you have incurred more debt than you can repay, bankruptcy is an option that can help you get the fresh financial start you need. There is a lot to think about when filing bankruptcy. There are different types, varying eligibility requirements, and more. Before you file, it is highly recommended that you first speak with a Palm Coast bankruptcy lawyer. Below, our seasoned attorney outlines the most important things to know about the process.

Different Chapters of Bankruptcy

The type of bankruptcy you file will depend on a number of factors. It will depend on whether you want to discharge your debt entirely, or repay it over a longer period of time. It will also depend on the type of bankruptcy you are eligible for. Three of the most common types of bankruptcy in Palm Coast are as follows:

  • Chapter 7 bankruptcy: This type of bankruptcy allows you to discharge most or all of your debt, meaning you are no longer legally responsible for it. You must pass a means test to show you do not have the income to repay the debt, and you may have to liquidate some assets to repay your creditors a portion of the debt owed.
  • Chapter 13 bankruptcy: A Chapter 13 bankruptcy may discharge some of your debt, but most of it is reorganized into a payment plan. Over three to five years, you will repay the debt and not lose any of your assets. Many people who do not qualify under the means test in Chapter 7 file Chapter 13 bankruptcy.
  • Chapter 11 bankruptcy: Chapter 11 bankruptcy is mainly used by businesses, although individuals who do not qualify for Chapter 13 often use this option. During a Chapter 11 bankruptcy, you can reorganize your debt into a new payment plan while still continuing to operate your company.

Exemptions in Bankruptcy

When filing a Chapter 7 bankruptcy, it is true that the trustee assigned to the case may liquidate some of the borrower’s assets and use the proceeds to repay the debt to creditors. However, Florida has some of the most generous bankruptcy exemptions in the country. Any property that is exempt is not liquidated and the borrower retains ownership of it. For example, any equity in a home is exempt as long as the property is less than half an acre in size.

Considering that borrowers do not lose any property in a Chapter 13 bankruptcy, exemptions in these cases work a little differently. The value of any non-exempt property is repaid to the creditors in the repayment plan created during the process.

Our Bankruptcy Lawyer in Palm Coast Can Advise on Your Case

If you are considering filing bankruptcy, do not go through the process alone. At the Law Offices of Carol M. Galloway, P.A., our Palm Coast bankruptcy lawyer can further explain the different types of bankruptcy and help you determine which one is right for you. Call us now at 904-694-5489 or contact us online to schedule a free consultation.

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