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Considering Bankruptcy?

When you are unable to pay your creditors, one option to consider is bankruptcy. Unfortunately, many of us fail to speak to an expert on Bankruptcy Law.

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Bankruptcy Florida: options for relieving debt

U.S. Bankruptcy Code delivers protection to people suffering under mountains of debt. Today, millions of people are exercising this protection. The bankruptcy laws were created by Congress to provide relief to those who have been victimized by divorce, job loss, identity theft, overbearing medical bills or disability. Usually, a combination of unfortunate events contributes to a person's inability to pay creditors. Filing for bankruptcy can provide a safe harbor and a new financial beginning for you.

Before filing for bankruptcy, you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and decide which form of relief is best for you. If you then decide to file for bankruptcy, documents called a Petition, Schedules and Statement of Financial Affairs, as well as a Statement of Intention need to be prepared and filed with the bankruptcy court.

When filing for bankruptcy, you must file under one of the following bankruptcy chapters:

Chapter 7 is the most common form of bankruptcy. It is a liquidation process in which the debtor's non-exempt assets, if any, are sold by a trustee and the proceeds distributed to creditors according to the priorities among creditors.

Chapter 7 is available to individuals, married couples, corporations and partnerships. Individual debtors get a discharge, which is a court order which states that you do not have to pay most of your debts. Some debts cannot be discharged, such as debts for most taxes, child support, student loans, court fines/criminal restitution and personal injury caused by DUI. Also, the discharge only applies to debts that arose before the date you filed. You can only receive a chapter 7 discharge once every six years. No one can make you pay a debt that has been discharged.

Assets which are not exempt are taken over by the trustee who sells them and pays creditors as much as the proceeds permit. Any wages the debtor earns after the bankruptcy case has begun are the debtor's. The creditors have no claim on those earnings.

Chapter 13 - Filing under Chapter 13 means that you can usually keep your property, but you must earn wages or have some other source of regular income and agree to pay part of your income to your creditors. The Court must approve your repayment plan and your budget. A trustee is appointed and collects the payments from you, pays your creditors and makes sure you live up to the terms of your repayment plan. The debtor keeps his property and makes regular payments to the trustee out of future income to pay creditors over a period of 3-5 years.

After filing a Chapter 7 or Chapter 13 petition, the court will issue an "Automatic Stay" order which prohibits any further action by your creditors to collect their debts from you.

Chapter 12 is a simplified reorganization for family farmers, modeled after Chapter 13, where the debtor retains his property and pays creditors out of future income.

Chapter 11 - This is used mostly by businesses. In chapter 11, you may continue to operate your business, but your creditors and the court must approve a plan to repay your debts. There is no trustee unless the judge decides that one is necessary; if a trustee is appointed, the trustee takes control of your business and property.

Though filing for bankruptcy florida can alleviate growing debt, remember that your bankruptcy may be reported on your credit record for as long as ten years and florida will most likely negatively affect your ability to receive credit in the future. Have one of our lawyers assist you in filing Today.