Foreclosure Defense and Bankruptcy Attorney serving Cocoa, Florida
Chapter 7 Bankruptcy
No one sets out to accumulate $8000 in credit card debt but a sudden illness, loss of job, or financial emergency can quickly deplete a savings account and force people to change normal living expenses.
Regardless of whether the debt was not your blame, the bills are still due and something must be done. If paying bills is not an alternative, Chapter 7 Bankruptcy may be the answer. In just a few short months, a Chapter 7 Bankruptcy can wipe out most unsecured debts. This debt includes credit cards and medical bills.
Chapter 13 Bankruptcy
If you are facing home foreclosure, Chapter 13 bankruptcy may help save your home. In Chapter 13 bankruptcy, a debtor and their attorney create a payment plan of three to five years. The plan is based around your budget after looking at your income, taxes and expenses. The length of the plan allows a debtor to catch up on the arrearage of their home.
The payment plans also allows you to get caught up with your creditors. This could include credit card, medical and other debt. A debtor in Chapter 13 bankruptcy will make payments to a trustee who will then distribute funds to the creditors.
Bankruptcy Can Be a Breath of Fresh Air | Lawyer serving Cocoa, Florida
Some residents of Cocoa may think bankruptcy is out of the question. Surrendering, only to be done when all other alternatives have failed and no other choice is left. The truth is that bankruptcy can breathe new life into a dying business or give a family a second chance to thrive, but if you wait too long, it may be too late to save your business, or you may have already lost assets you could have saved. If you are considering bankruptcy, it may be time to contact a Cocoa Bankruptcy Attorney.
Bankruptcy and Creditors
While residents of Cocoa may feel conflicted about discharging their debts, the truth is that more creditors recover more money when an insolvent debtor files bankruptcy than when they do not. That is because your non-exempt assets (property you cannot keep, as opposed to the property you can keep) get divided fairly among the creditors, instead of going to whoever gets judgment first. However, most people who file for bankruptcy relief have no non-exempt assets (meaning they keep everything). if you are facing foreclosure, it may be time to talk to a Cocoa Bankruptcy Attorney.
Exemptions and Bankruptcy
The exemptions in Florida are under Florida law, not bankruptcy law, which means even if you do not file bankruptcy, your creditors cannot take your exempt assets. In essence, bankruptcy stops your creditors from wasting money paying debt collectors to harass you and lawyers to get judgments against you, only to discover you were telling the truth, you really cannot afford to make a payment. If you have been harassed by a debt collector, it may be time to talk to an attorney at Faro & Crowder, PA.
Speak with an experienced Bankruptcy Attorney at Faro & Crowder, PA 321-784-8158
Our Foreclosure Defense and Bankruptcy Attorneys serve the residents of Brevard County and Cocoa, Florida. Our office offers free initial consultations for Bankruptcy and Foreclosure Defense. Call today to schedule your consultation or fill out the contact form below.
Three Types of Bankruptcy: Chapter 7, Chapter 13, and Chapter 11
Chapter 7 | Liquidation Bankruptcy
Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, is one of the fastest and most complete means for dealing with your debt. Chapter 7 can wipe out most of your unsecured debts which includes your medical and credit card debt.
In a Chapter 7 filing, all of your creditors are required to participate. This allows you to obtain true debt relief when your case is over. Chapter 7 is available for both consumer debt or business debt.
Chapter 13 | Reorganization Bankruptcy
Chapter 13 bankruptcy, or “reorganization” bankruptcy is available for consumer debt or business debt. In a Chapter 13 bankruptcy, a debtor (and their attorney) create a repayment plan for three to five years. The length of the plan depends on the debtors income. Chapter 13 is not available for debtors who debts exceeding certain thresholds.
Chapter 13 bankruptcy is a good option for a homeowner who has fallen behind on their mortgage payments. They have the length of the repayment plan to catch up on any arrearage bringing their mortgage current. In a Chapter 13, you can strip any unsecured liens from your home. The lien is removed from your home and the debt is treated as an unsecured debt, like a credit card. There is also an opportunity to mediate with your mortgage lender to make your mortgage loan more affordable.
Chapter 11 Bankruptcy
Chapter 11 is also a “reorganization” bankruptcy, available to business or consumer debtors. There are no income or debt barriers to Chapter 11, but it is generally more expensive and difficult to complete than Chapters 13 or 7. When you hear in the news that an airline or automobile manufacturer has filed bankruptcy, it is usually under Chapter 11. Chapter 11 bankruptcy can be a very complex process.
The debtor is required to provide a monthly accounting of all income and expenses, and is subject to the supervision of the United States Trustee. The Chapter 11 debtor must obtain permission from the Bankruptcy Court to pay the business owners’ salaries (in the case of a business bankruptcy), to pay any wages owed at the time of filing, or to hire professionals (including the attorney who files the Chapter 11 Bankruptcy Petition, and the accountant who prepares their tax returns).
Creating a Chapter 11 Plan
Like in Chapter 13, you must create a plan in Chapter 11. However, in Chapter 13 your plan must simply comply with legal requirements, and then if it is confirmed by the Court, when your payments are complete, your dischargeable debts are discharged. In Chapter 11 you must send copies of your plan and a disclosure statement clarifying the details and effects of your plan on all of your creditors, with ballots.
Your creditors are then permitted to vote on your plan. Unless sufficient creditors vote to confirm your plan, the Court will not confirm it. There are exceptions allowing a plan to be confirmed over the objections of all creditors, but generally the debtor will not be allowed to keep any property under those exceptions unless all creditors are repaid 100% of their debts with interest, under the “absolute priority rule.” In the case of General Motors, owners of the pre-bankruptcy GM stock were left with worthless stock, and stock in the new General Motors Company was made available through and Initial Public Offering in November of 2010.
Chapter 11 is difficult, and very few Chapter 11 Bankruptcies result in a confirmed plan, with even fewer succeeding. A business considering Chapter 11 must consider feasibility. Bankruptcy reorganizes debts, and if debt service is keeping you from succeeding, reorganization may work. If your business does not generate enough income to cover its ongoing expenses (like utilities, necessary rent, and payroll), it is unlikely that reorganization will help. Michael Faro and J. Christopher Crowder have both successfully obtained confirmation of reorganization plans in Chapter 11 Bankruptcies. If your business, homeowners’, or condominium association is struggling to keep up with debt payments, schedule an appointment to talk about creating a plan to get back on track.
Learn More about Your Cocoa Bankruptcy Options today from an Attorney at Faro & Crowder, PA
We provide services throughout Brevard County and the Space Coast including Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, Cape Canaveral, Indian Harbour Beach, Rockledge, Eau Gallie, Viera and West Melbourne. Contact our office today to set up a free consultation with a bankruptcy relief lawyer.
Faro & Crowder, PA
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.