Anyone can be encumbered with significant debt and the stress of financial obligations. Failing to pay credit card bills or medical bills can result in harassing phone calls from creditors, wage garnishment, and lawsuits. If you are experiencing substantial debt and creditor harassment in connection with collection efforts, one possible solution to your financial troubles is filing for bankruptcy. The bankruptcy attorneys at the Martin Law Firm offer advice and representation to people who are filing under Chapter 7 or Chapter 13. Our Naples bankruptcy lawyers have obtained thousands of discharges for individuals in Southwest Florida.Understanding the Bankruptcy Process
Two types of bankruptcy are commonly filed by individuals. The first is Chapter 7 bankruptcy, also known as liquidation bankruptcy. The other is Chapter 13 bankruptcy, which is known as reorganization bankruptcy. Both types of bankruptcy are filed in order to obtain a bankruptcy discharge. If you receive a discharge of your dischargeable debts, you will no longer be liable to repay those debts.
The type of bankruptcy that you are eligible to file is determined by the means test. This test determines whether your income is low enough to file for Chapter 7 bankruptcy. The means test prevents people who have a high enough income to repay their debts in an appropriate time frame from filing for Chapter 7 bankruptcy. Like anyone else, a wealthy person may find him or herself unable to work due to a medical disability or another emergency. In most cases, however, people with high incomes who are able to continue working, and whose expenses are manageable in light of their income, will file for Chapter 13 bankruptcy.
To file for Chapter 13 bankruptcy, you will need to create a debt repayment plan. People whose income is irregular or low may not be able to convince the court that they can repay their debts. Your debt repayment plan should address the repayment of your debts over 3-5 years. A bankruptcy attorney in Naples can advise you on how to craft a strategic plan.
Some of your debts may be priority debts, which must be repaid in full. Priority debts include some tax obligations, child support, and spousal support. Your plan must also address paying off secured debts. Secured debts are those that are secured by collateral, such as car loans or mortgages on your home. Creditors are entitled to seize collateral if you do not repay the loan. Disposable income that remains after the priority and secured debts are addressed is used to pay off your unsecured debts, such as credit card and medical bills.
Unlike Chapter 7 bankruptcy, in which property is only protected through exemptions, Chapter 13 bankruptcy permits you to use multiple different techniques to keep your property. For example, in a Chapter 13 bankruptcy, you can strip or remove junior mortgages from your home if you owe more on your first mortgage than the fair market value of the house. You can also use cramdowns to reduce the principal balance of secured debts in situations in which the collateral is worth less than the amount that you owe. The balance you owe on a car loan, for example, can be reduced to the value of the car by which it is secured.Consult a Bankruptcy Lawyer in the Naples Area
Naples is a wealthy city in southwest Florida. It is part of Collier County, which has a population of over 330,000 people. Naples has the sixth-highest per capita income in the United States. The city's median income is over $100,000. Although Naples is an affluent community, residents may encounter financial trouble that makes it necessary to seek debt relief. If you are considering filing for Chapter 7 or Chapter 13 bankruptcy, the experienced Naples bankruptcy attorneys at the Martin Law Firm are available to help you. Contact us toll-free at (844) 465-4357 or via our online form to set up a consultation with a debtor rights attorney.