Chapter 7 vs. Chapter 13 Bankruptcy: Which Is Right for Central Florida Residents?

When debt becomes overwhelming, it can feel like there’s no clear way forward. Many individuals and families across Central Florida face mounting credit card balances, medical bills, mortgage arrears, or collection lawsuits that make it difficult to regain financial stability. Bankruptcy is a legal tool designed to provide relief—but choosing between Chapter 7 and Chapter 13 bankruptcy can be confusing.

Understanding the differences between these two options is an important first step toward protecting yourself from creditors and rebuilding your financial future.

Understanding Bankruptcy in Florida

Bankruptcy is governed by federal law, but Florida-specific exemptions and local procedures play a major role in how your case unfolds. Both Chapter 7 and Chapter 13 bankruptcy can stop creditor harassment, wage garnishments, lawsuits, and foreclosure actions through the automatic stay, which goes into effect as soon as a case is filed.

However, the right chapter depends on your income, assets, debts, and long-term financial goals.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy,” although many people are able to keep most or all of their property due to Florida’s generous exemption laws.

Key Features of Chapter 7:

• Eliminates most unsecured debts, such as credit cards and medical bills
• Typically completed in about 3–4 months
• Does not require a repayment plan
• Designed for individuals with limited income and overwhelming unsecured debt

Who Chapter 7 May Be Right For:

• Central Florida residents with little to no disposable income
• Individuals facing aggressive creditor collection efforts
• Those who want a faster path to debt relief

Florida’s homestead exemption often allows homeowners to protect their primary residence, making Chapter 7 a viable option for many local residents.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a reorganization option that allows you to repay some or all of your debts over a 3- to 5-year period while keeping your property.

Key Features of Chapter 13:

• Creates a structured repayment plan based on your income
• Allows you to catch up on past-due mortgage or car payments
• Can stop foreclosure and repossession
• Helps manage tax debt and certain obligations that cannot be discharged

Who Chapter 13 May Be Right For:

• Individuals with steady income
• Homeowners behind on mortgage payments
• Those who do not qualify for Chapter 7 due to income limits
• Debtors seeking time to reorganize finances rather than eliminate debt immediately

Chapter 13 is often used by Central Florida residents who want to protect valuable assets while gaining relief from creditor pressure.

How Bankruptcy Protects Central Florida Residents

Both Chapter 7 and Chapter 13 provide immediate protection from creditors through the automatic stay. This means:

• Collection calls must stop
• Lawsuits are paused
• Wage garnishments are halted
• Foreclosure and repossession actions are delayed or stopped

These protections give you breathing room to evaluate your financial situation and work toward stability.

Choosing the Right Bankruptcy Option

No two financial situations are the same. Factors such as income, property ownership, family size, and long-term goals all influence which bankruptcy chapter may be appropriate. Filing under the wrong chapter can lead to unnecessary stress or missed opportunities for relief.

Attorney John A. Russo has helped Central Florida residents navigate bankruptcy and debt relief for nearly two decades. He takes the time to review each client’s situation, answer questions, and explain available options clearly—so you can make informed decisions about your financial future.

Take the First Step Toward Financial Relief

If you are struggling with debt and unsure whether Chapter 7 or Chapter 13 bankruptcy is right for you, help is available. You do not have to face creditor pressure alone.

📞 Call The Law Office of John A. Russo, P.A. at 833-RUSSOFL to schedule a consultation and learn how bankruptcy may help you move forward with confidence.