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What is Bankruptcy and why Consider it

What is Bankruptcy?

The main purpose of bankruptcy is to give the honest person, who is hopelessly burdened with debt, a “fresh start” by wiping out or restructuring their debts. Bankruptcy provides you the opportunity to get back to a stable financial situation by eliminating the debt that is simply unmanageable or providing you the opportunity to reorganize that debt in such a way that it can be paid off over a longer period of time.  At the Rosenthal Law Group in St. Petersburg, FL,  can provide the  information, advice and expert legal representation you need.  Our our bankruptcy attorneys will file your chapter 13 bankruptcy or chapter 7 bankruptcy, stop any harassment by creditors and give you the opportunity to begin rebuilding your credit.

The Different Types of Bankruptcy

There are many different types of bankruptcy; however, most consumers work with their bankruptcy attorneys to choose between filing for Chapter 7 bankruptcy and Chapter 13 bankruptcy. 

Chapter 7 Bankruptcy

Also called “straight bankruptcy”.  The debtor receives a discharge of all dischargeable debts usually within four to six months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start" without paying back the debt…read more

Chapter 13 Bankruptcy

Is also called "reorganization". Chapter13 bankruptcy is filed by individuals who have the ability to pay some or all debts over a period of three to five years.  However, generally only a very small percentage of the debt must be paid. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also an option for individuals who have sufficient income to pay reasonable living expenses with some amount left over to pay a portion of their debt…read more

Who Qualifies for Bankruptcy

With the 2005 changes to the bankruptcy laws came some new requirements that prospective filers had to meet. The simple announcement of these new requirements made people think that they would no longer qualify for bankruptcy when, in fact, the vast majority of people who qualified before the new laws took effect still would have qualified after.

If you are considering filing for Chapter 7 bankruptcy, you will first need to pass the means test. The means test is designed to keep the system from being abused and reduce frivolous bankruptcy filings. The means test will compare both your income and disposable income to that of others in the State of Florida. If, for any reason, you do not pass the means test, you may still be able to file under Chapter 7 under certain circumstances. If you do not qualify for Chapter 7, you may still be able to file under Chapter 13 to get the debt relief you need.  Even if another attorney has told you that you don't qualify for chapter 7, please contact us. Many attorneys don’t apply the means test properly. We may still be able to help you.

In addition to the means test, you may also be required to complete of a court-approved credit counseling class. The class will provide you with the information you need to determine if bankruptcy is your best option.

You also cannot file Chapter 7 bankruptcy if you have within the past eight years. You may, however, be eligible for Chapter 13 regardless of past filings.

There are alternatives to filing bankruptcy that may be a better option for you, debt consolidation or negotiation may be able to provide the relief you need, without having a bankruptcy on your credit record.  We can help you determine the best course of action for you and your specific circumstances.  Call us today to schedule a consultation and begin the process of getting your life back.