Most people are hesitant to file bankruptcy because they feel it is a sign of failure and an unwillingness to meet their financial obligations. The truth is, that many people who file bankruptcy intend to pay their debts but are unable to because of such things as injury, illness, divorce, loss of a job, and other circumstances which can easily lead to financial struggles. If you would like to explore your legal options for financial relief, you should not hesitate to discuss your situation with an experienced Florida bankruptcy attorney today. Lawyer Kathryn Welsh has helped many individuals and couples regain control of their finances through bankruptcy and other debt-relief options, so please call for a consultation today.
Types of Consumer Bankruptcy in Florida
There are different types of bankruptcy available for consumers in the United States and the right type for you depends on the specifics of your situation. The following are the two most common types of consumer bankruptcy:
Chapter 7 bankruptcy – Bankruptcy under Chapter 7 of the United States Bankruptcy Code is referred to as “liquidation” bankruptcy. Not everyone can qualify for Chapter 7 bankruptcy as you must first pass a “means test”. This test often prevents individuals or couples with higher incomes from qualifying for bankruptcy under Chapter 7. This type of bankruptcy will result in the discharge of all your qualifying debts. While you will not be expected to make regular monthly payments to repay the debt to your creditors, you may have to surrender some of your assets to proceed under Chapter 7. After receiving a discharge of your debts in a Chapter 7 bankruptcy you will be left with a relatively clean slate. A chapter 7 bankruptcy usually wipes out credit cards; signature loans; medical bills; most court judgments; automobile repossession deficiencies and some IRS debt. You will also have the opportunity to decide whether you want to maintain your secured debts and keep those assets that are secured by those debts. Examples of secured debts are real property mortgages and car loans.
Chapter 13 bankruptcy – Bankruptcy under Chapter 13 of the United States
Bankruptcy Code sets out the requirements and procedures for “reorganization” bankruptcy. This type of bankruptcy can have major benefits for certain people. A Chapter 13 bankruptcy may allow for the following: stop foreclosure proceedings and allow you to catch up on your back house payments; permit you to catch up on car payments; eliminate second mortgages and home equity lines of credit; stop wage garnishments; pay unsecured debts at a fraction of the principle amount owed; and adjust the value of a vehicle if it has been owned more than 910 days or was purchased for the use of someone other than the debtor. Chapter 13 is significantly different from Chapter 7. Unlike Chapter 7 where you usually receive a discharge of your debts in a relatively short period of time, in a Chapter 13 bankruptcy you are required to make a monthly payment to the bankruptcy trustee for three to five years before any of your debts can be discharged. The payment amount will be based on your income, expenses, and debt. While you have to make payments, you usually do not have to give up any of your property. This can make Chapter 13 bankruptcy preferable for those with substantial assets or income in excess of the amount permitted by the means test.
Call a Qualified Bankruptcy Attorney in Florida for Help
The decision whether or not to file bankruptcy should be carefully considered with an attorney helping you weigh your options. In addition, if you are facing a divorce, you should consult with an experienced lawyer who can advise you whether to file bankruptcy before or after the divorce is final. It can be extremely helpful to have legal representation from someone who fully understands bankruptcy law, family law, and how the two areas of law intersect.
At KM Welsh, P.A., we will carefully assess your financial and legal situation to help you find the best option so that you can begin with a clean financial slate. Please call us today at 727-586-7088 for more information.