When Tampa debtors filing for bankruptcy have significant assets or income, they are ineligible for filing under Chapter 7, which is a total liquidation. While that might sound like a good deal, it also means that any non-exempt assets can be sold off to pay your creditors.
Many debtors who file under Chapter 13 do so to take advantage of the terms of the reorganization that don’t require them to sell all their non-exempt possessions.
Chapter 13 is known as a “wage-earner’s reorganization” for several reasons. They have to have sufficient income to stick to the terms of the debt repayment plan, which is either three or five years.
They must be able to pay more through the approved plan than the creditors would receive if all the assets were sold in a Chapter 7 filing.
Debtors must also stick to their commitment to contribute all disposable income to pay these debts off. That can be difficult to do over a period of three to five years.
In many ways, it is preferable to file for bankruptcy under Chapter 13. That indicates that you at least earn a sustainable living wage and are not completely indigent like those who file for Chapter 7 bankruptcy.
It may be that there is another form of bankruptcy that offers you more advantages or options, especially if you own or co-own a business. Because of the complexities inherent in any bankruptcy case, it is always advisable to seek the counsel of a Tampa bankruptcy law attorney before taking any action regarding filing for bankruptcy here in Florida.