' Bankruptcy Liquidation Reorganization - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Liquidation, reorganization; what’s the real difference?

Unmanageable debt is something that can hit those that make minimum wage and those that are considered high-income earners. It can affect small businesses, large corporations, investors and entrepreneurs. Bankruptcy is a place where they can turn to get things back under control, but there are four chapters that apply to individuals and businesses: Chapter 7, 11, 12 and 13.

For the average Florida resident, there are a couple types that can be immediately eliminated. Chapter 12 is applicable to family farms and not used as often. Chapter 11 applies to businesses and corporations, while this is a widely used type; it is not for personal bankruptcy. That leaves us with Chapter 7 — which is known as the liquidation bankruptcy — and Chapter 13 — which is known as the reorganization bankruptcy.

Chapter 7 is considered the liquidation bankruptcy, because a debtor puts their assets up for review from the bankruptcy trustee who can decide to sell them to satisfy as much debt as possible. An individual then walks away with a discharge of their debt — meaning that they no longer are under an obligation for it. While assets can be liquidated, there are certain exceptions, including ones that you petition to exclude.

An exemption from liquidation can include practical items like a vehicle you wish to keep. It is difficult to make a living after exiting bankruptcy if you can’t get to your job — let alone all the other things you use your car for on a daily basis. Something like a motor vehicle can be petitioned to keep out of the liquidation process.

Aside from the practical exclusions that are necessary for everyday life, there are some that are absolutely necessary for your future. Take for example retirement accounts. If these were taken from you during bankruptcy it would make the future more difficult, not less. This is why IRS-recognized retirement accounts like 401(k)’s or IRA’s, an individual can exempt them in this process 100 percent.

Which debts will be put up for liquidation and which ones will be exempted takes planning. An attorney experienced in these types of filings has seen it all and can help make these decisions fit for the individual’s personal situations. In our next post, we’ll cover Chapter 13 bankruptcies.

Source: Reporter, “Understanding how bankruptcy works,” Jan. 16, 2013

If you want to learn more about the bankruptcy process in Florida, our law firm has extensive experience in helping individuals and families get the fresh start that they need.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Should I Sell My Home to Get Out of Debt?

Debt is a common modern problem. Whether it's credit cards, student loans, or medical bills, debt can cripple even the...
Read More

What to Ask a Bankruptcy Lawyer

What should you ask a bankruptcy lawyer? Financial problems can be incredibly stressful. One option that many people turn to...
Read More

Is It Easy to File for Bankruptcy?

Bankruptcy is a legal process that allows individuals and businesses to eliminate or reorganize their debts. It offers relief to...
Read More

How to Stay Motivated to Pay Off Debt

If you are struggling with debt, you are not alone. The average American has tens of thousands of dollars in...
Read More

Can I Fire My Bankruptcy Attorney?

Filing for bankruptcy can be overwhelming. Your bankruptcy attorney plays a crucial role in navigating you through the process. Unfortunately,...
Read More

Am I Responsible for My Parent’s Credit Card Debt?

As we grow older, our parents also age. Sometimes they become dependent on us in many ways. Even if they...
Read More

How to Hide from Debt Collectors

There are many ways to “hide” from debt collectors. You can ignore their calls, not answer your door, or ask...
Read More

Is Your Spouse Responsible for Credit Card Debt in Florida?

Debt can be overwhelming, especially when you're not sure who is responsible for it. That's why it's important to understand...
Read More

What Happens If You Ignore a Debt Collector?

Debt can be overwhelming. It’s easy to let bills pile up and miss payments, and before you know it, you...
Read More

Can I Sue a Debt Collector for Emotional Distress?

Debt collectors can be aggressive when collecting unpaid debts. Some try to bully you into paying. Many leave you feeling...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions