Chapter 7 is known as a Straight Liquidation. In a Chapter 7 filing, debtors can usually eliminate unsecured debts, such as medical bills, credit cards, repossession and signature loans. There is a limitation as to the amount of property that you can keep after filing.  The amount of property that can be kept is shown on Florida Exemptions as well as the additional Federal Exemptions that supplement Florida’s exemptions.  Any property that exceeds these exemption amounts must be surrendered to the trustee or be bought back from them over a very short period of time.  If you have a business, your stock is worth something, usually based on the assets of the company and may be lost in this type of bankruptcy.

Chapter 13 is a re-organization.  A “plan” is made where you pay the trustee each month.  You regular secured payments, such as your house payment, car payments and other secured payments plus a fraction of your unsecured debt is paid to the trustee who administers your estate while you’re in bankruptcy.  You also get to catch up on any missed payments, thereby preventing a foreclosure or repossession, therefore, you get to keep your home or car.  In this type of bankruptcy, your allowed to continue your business without forfeiture of stock or property. At the end of the plan, you get a discharge of your unsecured debts and continue to pay your secured creditors as usual.