Bankruptcy in Florida

Making the decision to file bankruptcy is never easy. Everyone, no matter what state they live in whether it's California, Florida, or New York faces the risk of having to declare that after having tried all options to pay off their debts, there is no other solution left but bankruptcy. But most people know very little about filing bankruptcy, which is a legal process that allows them to pay some or all of their debts over time under Chapter 13 or Chapter 11, or have their entire debt discharged or forgiven under Chapter 7 bankruptcy. When people come to us with bankruptcy questions such as which type is right for them, we often suggest they consult with an attorney who specializes in debt resolution. If you live in Florida or a even a neighboring state, it may be wise to contact lawyers and other financial experts that can help you explore bankruptcy or other debt relief options.

In a Chapter 7 bankruptcy case, you are allowed to keep "exempt" property, while your remaining non-exempt assets are liquidated by the court and the proceeds distributed to your creditors and lenders. Once your eligible assets have been sold off and your creditors are paid off, then you will be relieved of your debt obligations. Some people who have a steady income and are still able to pay a portion or all of their debts over time usually resort to filing Chapter 13 bankruptcy. In a Chapter 13 case, you will typically get to retain certain exempt assets, like your car or house, which you might otherwise lose through the bankruptcy process. What's considered exempt vs. non-exempt property varies from state to state, so make sure you refer to your state's bankruptcy laws to find out what you are able to keep. The bankruptcy exemptions in Florida, for instance, may be different from the applicable laws in other states, so keep this in mind when you're in the process of filing Chapter 13. For business owners that are struggling to pay off their creditors and do not qualify for Chapter 13 bankruptcy, they usually resort to filing either Chapter 7 or Chapter 11 bankruptcy, also known as reorganization. In a Chapter 11 case, for example, you stay in control of your business and keep certain assets while a court-appointed trustee oversees the operations of your business.

Keep in mind that filing bankruptcy does not wipe out all your debts. As a general rule, you will still be responsible for paying alimony, child support, student loans, any fines or penalties, or recent back taxes. In addition, there are immediate consequences when you file personal bankruptcy. Filing Chapter 7 will stay on your credit report for up to 10 years, and for Chapter 13, it stays on your credit for seven. So on top of negatively impacting your credit, filing personal bankruptcy may result in more long-term consequences such as higher interest rates on new loans and big-ticket purchases, or higher premiums on your insurance.

In spite of the consequences of filing bankruptcy, many people consider it their last-resort option, especially when they have exhausted all other means of finding debt reliefs such as enrolling in a debt management plan, taking out a consolidation loan, or even debt settlement. In Florida, as in most states, one of the first steps in filing bankruptcy is to pass the means test. Established by the government to make sure that consumers who are able to pay back their debts did not abuse the bankruptcy system, the means test will compare your monthly income against the state's median family income for a family your size. If your income exceeds the state's median income, you may not be eligible to file personal bankruptcy. Once you do pass the means test, there are several things you can do to ensure that the process goes on smoothly. Make sure you're ready to submit all the necessary forms when filing your bankruptcy petition such as records of your assets and liabilities, copy of your current tax return, stubs, deeds, automobile titles, your current income, or a statement that you received credit counseling from a government-sanctioned organization within six months before you filed.

As you may have noticed from the information we supplied, bankruptcy laws are complex and varies depending on what state you live in. Filling bankruptcy may be one of the most important decisions you will make, one that has the potential to give you a fresh start. Before going the route of bankruptcy, it is wise to explore alternative debt relief options. We can help you get a free debt relief analysis and savings estimate at no obligation.