Bankruptcy in Florida: Anyone struggling financially at some point considers filing for bankruptcy. Bankruptcy is a legally declared inability or impairment of ability of an individual to pay his or her debts. Whether personal or business bankruptcy is declared, it is the constitutional right of all Americans to seek help from the courts to eliminate or deal with debt.
Although bankruptcy is spelled out in the constitution and several federal laws have been enacted covering bankruptcy, it is still strongly under state jurisdiction.
Under the Federal bankruptcy code, there are several different chapters and bankruptcies are generally categorized based on what bankruptcy chapter a petition is filed under.
There is no perfect time to decide when bankruptcy is the right choice to make. The only way to know for certain, is when you decide enough is enough.
Normally, bankruptcy is an option for consideration if a consumer is paying only the minimum payments on all bills, cannot budget themselves out of debt in five years, are getting foreclosure notices, or have had a severe financial setback due to loss of a job or medical issues.
Divorce can also force one or both of the couples into a bankruptcy situation as well as losing a major client or professional resource.
The good news for anyone seeking this legal program is that there is no shame in filing bankruptcy in Florida. In fact, in Florida close to 35 thousand people filed for bankruptcy for various reasons as permitted by law.
The process is designed to give any honest debtor a clean start. Most of the time, people wait until their credit is destroyed and they have exhausted every ounce of credit they can get just to survive. Under the bankruptcy system, it does not need to go that far.
Under the United States Code, there are a few different types of bankruptcies available to individuals and organizations. Chapter 7, which is one of the two most common types of consumer or personal bankruptcy, is considered liquidation.
Under chapter 7 bankruptcy in Florida, a trustee appointed by a court gathers and sells any nonexempt property, and the proceeds go to pay off creditors.
The next type of bankruptcy is chapter 9, which covers reorganization for municipalities. This type of bankruptcy cannot be used by individuals and is only used to reorganize, not liquidate, a city. Chapters 11, 12, and 13 are the next type and deal with reorganization of an individual.
In Florida, chapter 13 is the other most common type of bankruptcy filed. Instead of liquidating, under a chapter 13 the court allows the debtor to keep some of his or her property and sets up a plan to pay back all debts over time.
Many people avoid bankruptcy due to misconceptions. They believe it will ruin their credit for the entire time it shows up on their credit report. Typically, a bankruptcy will list on a credit report for up to 10 years or 7 years in the case of a chapter 13.
The reason for this is that a credit-reporting agency is allowed to report bad credit for up to 10 years, so it is better to show a bankruptcy than just 7 to 10 years of bad credit. Even after a bankruptcy, most people can reestablish good credit in as little as 18 to 24 months. Other people do not believe they qualify for a bankruptcy in Florida.
Bankruptcy is not like applying for a loan, as it is a right for any American. In certain cases, a chapter 13 can be denied by a court if a submitted plan is not feasible, but that is an exception to the rule and an individual and instead file for a chapter 7.
In most bankruptcy cases, a debtor can keep debt. Under Florida law, a person’s residence and vehicle is exempt. In many cases, attorneys will recommend that a person even keeps a credit card as long as they can afford it in order to book airline tickets or rent a car if an emergency comes up.
Like every other service, Americans want the most for their money. General questions to ask an attorney include whether they charge a flat fee, is everything included in that fee, are there any additional charges outside of a flat fee, and sometimes the most important question is whether they will be given advice by the attorney themselves or turned over to a paralegal or secretary.
Other pertinent questions that should guide the selection of an attorney beyond the fees include whether the attorney will be at all legal meetings, is available anytime for an appointment at no additional fees for advisement, and is the attorney primarily a bankruptcy lawyer or do they do other cases also?
Finding a good attorney to trust can make a huge difference in how the process of a bankruptcy in Florida is conducted.
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