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Nowack & Olson, PLLC Florida Bankruptcy Lawyer
  • $0 down and low payment plans available. We can assist you without having to leave your home.

Should you file for Chapter 7 or Chapter 13?

With many Florida homeowners continuing to experience financial challenges, filing for bankruptcy might seem like a good option to provide them some debt relief. Chapter 7 and Chapter 13 are two main forms of bankruptcy that may allow consumers struggling with debt to get back on their feet. Which type of bankruptcy to file for depends on several factors, including the amount of debt and home equity a person has.

Chapter 7 bankruptcy is also known as the fresh-start bankruptcy. It lets most people wipe out their debt, and can still allow them to keep their home, car, and some other assets. There are a few factors a bankruptcy court needs to consider before deciding if a homeowner can qualify for Chapter 7. If you don’t have very much home equity, you stand a better chance of being able to file for Chapter 7.

Having a sizable amount in equity means the profit from selling a home can be used to pay off debts. In this case, consumers may wish to consider Chapter 13 instead if they want to keep their home. Chapter 13 reorganizes debt and allows consumers to repay it within three to five years. This protects homeowners against foreclosure and gives them a chance to catch up on overdue mortgage payments or property taxes while still retaining their assets.

Before deciding if bankruptcy can help you make a fresh financial start, it’s important to weigh the differences between Chapter 7 and Chapter 13 carefully and speak with a bankruptcy lawyer about your options.

Source:, “Can you file Ch. 13 bankruptcy if you own a home?” Justin Harelik, Mar. 5, 2013

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