Dealing with debt is never easy, and if you’ve gotten in over your head, there is an option. But you’ll probably want to consult with a bankruptcy attorney Jacksonville before you consider filing, because there are a lot of things to know about the process. The right lawyer can shepherd you through the entire procedure and allow you to focus your attention on getting back on your feet.

There are two major types or ‘chapters’ of bankruptcies that most individuals file under. These are not the only options, but the other four scenarios are less likely, or reserved for certain groups such as municipalities and family farmers. The most common filings for individuals are made under Chapters 7 and 13.

Often referred to as liquidation bankruptcies, filings under Chapter 7 involve seizure of most of the debtor’s property in exchange for wiping out most types of debt. Unsecured debt such as credit cards are the main items affected. The things you can keep after a Chapter 7 filing are dictated by state law, and include personal possessions such as clothing and furniture.

If a person filing under Chapter 7 wants to keep an unsecured asset, such as a car they are still paying off, a formal agreement can be made between the lender and the debtor in order to exclude this property from the filing. In exchange for continuing to receive payments on time and in the proper amount, the lender agrees not to repossess the vehicle.

Chapter 13 bankruptcies are often called ‘wager earners’ plans’ because they allow the debtor to keep his or her property in exchange for making certain monthly payments on time. A certain amount of disposable income is required each month in order to be eligible for this plan. During this type of filing, the court decides what the person can afford, what the creditors would have received if the debtor had filed under Chapter 7, and more, in coming up with the required monthly payments.

Mortgages are a major reason why people file under Chapter 13. Foreclosures that are not yet complete are halted by filing under Chapter 13, though complete foreclosures are not affected. In order to prevent the foreclosure process from being restarted, however, the debtor must make all payments due on or after the date of filing.

There are some debts that filing cannot eliminate. Secured debt is generally eliminated as well as unsecured debt, but in doing so, the items in question are repossessed. Student loans are not eliminated unless the debtor can prove that not only are they currently unable to pay, but they anticipate never being able to pay, which is a hard thing to prove. Check with your bankruptcy attorney Jacksonville if you are wondering whether your debts can be eliminated in this way.

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