It’s become obvious that you can no longer manage your debts. Turning to an attorney, you begin to explore the options for personal bankruptcy. After taking a look at your situation and administering what’s known as a means test, the attorney recommends that you seek what’s known as a Chapter 13 bankruptcy in Tampa. Why would a Chapter 13 be better than a Chapter 7 in your case? Here are some factors that led to the recommendation.
The Type of Debt Involved
Not all types of debt can be dismissed in a Chapter 7 bankruptcy. Others may only be eligible for discharge under a narrow set of circumstances. Your attorney recommends a Chapter 13 because all or part of your debt cannot be discharged.
Those debts could include back alimony, taxes that are due but not paid, student loan debt, or judgments against you in a wrongful death case. While they can’t be discharged, the Chapter 13 will allow you pay on those debts through the court. Hopefully, they can be paid in full during the 60-month period that is the maximum norm for this type of bankruptcy protection.
The Desire to Hang on to Certain Assets
A Chapter 7 may require you to turn over certain assets to a bankruptcy trustee, so they can be sold, and the proceeds shared among your creditors. By contrast, Chapter 13 bankruptcy in Tampa will likely allow you to retain ownership of those assets. Your attorney can help you understand what the court considers exempt and non-exempt assets.
Your Ability to Repay at Least Part of the Debt
You’re not likely to be granted a Chapter 7 bankruptcy if there’s evidence that you have the ability to repay all or at least most of your debt. This is where the means test comes into play. Chapter 13 bankruptcy in Tampa is ideal for someone who generates enough income to cover his or her basic living expenses and pay something on those outstanding debts. While it may take three to five years, you emerge from the bankruptcy with no debt.
Is a Chapter 13 bankruptcy right for you? Talk with an attorney and explore all of your options. You may find that this approach is ideal and helps you eventually become financially secure again.