Beginner’s Guide to Bankruptcy


Bankruptcy gives people the ability to achieve debt relief. If you’re struggling with debt and feel that your financial situation is tying you down, bankruptcy can give you a fresh new start. However, it is difficult to file for bankruptcy if you don’t know anything about the process. For such reasons, our Fort Lauderdale bankruptcy attorneys have put together the ultimate beginner’s guide to bankruptcy.

If you want to file for bankruptcy, our team at LSS Law is here to help you. Contact our Fort Lauderdale bankruptcy attorneys today at (954) 932-5377 to schedule a consultation!

Different Types of Bankruptcy for Individuals

There are different types of bankruptcy chapters available to individuals. Each bankruptcy chapter is tailored to help individuals with their unique financial situation. The most common types of bankruptcy for individuals include Chapter 7, Chapter 13, and Chapter 11 bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common type of bankruptcy because it erases most debt in only a few short months. Chapter 7 bankruptcy may be beneficial if you want to erase your overwhelming debt as quickly as possible. When a debt has been removed, it means that a creditor cannot hold you personally liable for the debt or carry out collection actions against you. It also brings an end to creditor calls and wage garnishment and other types of collection activity.

To qualify for Chapter 7 bankruptcy, you may need to take the means test. The means test will compare your income with the average state income. If your income exceeds the average state income, you may not qualify for Chapter 7 bankruptcy. Our Fort Lauderdale bankruptcy attorneys will do the analysis with you to ensure that you qualify for Chapter 7 bankruptcy.

Chapter 13 Bankruptcy

If your debt payments are too overwhelming, and you don’t qualify for Chapter 7 bankruptcy, Chapter 13 might be the right option for you. Chapter 13 bankruptcy can also help you if you own assets that would otherwise be liquidated in a Chapter 7 case or if you want to restructure certain debts. Chapter 13 is essentially a reorganization plan that allows you to consolidate every bill into one monthly payment supervised by the court. A Chapter 13 debtor is allowed to keep their assets and pay creditors with lower or no interest accruing, and the process can stop foreclosures, collection lawsuits, and repossessions.

Chapter 11 Bankruptcy

Most Chapter 11 cases involve corporate restructures, but the process can be used for a personal reorganization, as well. A Chapter 11 case is designed to handle even the most complex problems of an individual with a large amount of debt. If you don’t qualify for Chapter 7 bankruptcy or your debt limits aren’t sufficient for Chapter 13 bankruptcy, Chapter 11 might be the right option for you.

What Debts Can Be Discharged With Bankruptcy?

The primary purpose of filing for Chapter 7 bankruptcy is to discharge (wipe out) debts. When you file for Chapter 7 bankruptcy, it releases the debtor from the responsibilities of paying back that debt. There are a wide variety of debts that can be discharged under Chapter 7 bankruptcy. Below is a list of the most common dischargeable debts:

  • Attorney fees (except child support and alimony awards)
  • Auto accident claims
  • Business debts
  • Civil court judgments
  • Collection agency accounts
  • Credit card charges
  • Medical bills
  • Money owed under lease agreements
  • Personal loans from friends, family, and employers
  • Repossession deficiency balances
  • Revolving charge accounts
  • Utility bills (past due amounts only)

When a person completes their Chapter 13 repayment plan, they receive a discharge order that will wipe out the remaining balance of qualifying debt. Chapter 13 bankruptcy provides people with an even broader discharge because it wipes out some debts that aren’t dischargeable in Chapter 7. For example, in certain instances, it can wipe out debts incurred to pay non-dischargeable taxes, government fines, and more.

Bankruptcy is a complex process that shouldn’t be handled alone. Our team at LSS Law is here to help you. Contact our Fort Lauderdale bankruptcy attorneys today at (954) 932-5377 to schedule a consultation!


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