A: People who are being sued by creditors should consult a bankruptcy attorney as soon as possible. Other people who should consider bankruptcy include: people who have had a decrease in income, but not a decrease in expenses, people with overwhelming medical or credit card debt, and people who are struggling to pay for homes or vehicles.
A: There are two types of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7's are simpler and more straightforward and result in the discharge of unsecured debt (debt with no collateral). When debt is discharged, people are no longer obligated to pay it. Typically, people who are under the median income for their household size will qualify for a Chapter 7, unless they had a Chapter 7 Bankruptcy within the past eight years.
A variety of supporting financial documents is necessary for either type of bankruptcy, such as six months of pay stubs and bank statements, tax records, titles to vehicles, and deeds to property.
Chapter 13's are designed for people who are over the median income for their household size or for people who are trying to get caught up with payments on collateral such as a home or a car. In a Chapter 13 bankruptcy, people make payments over a 3-5 year period to a bankruptcy trustee who disperses the money to creditors.
Chapter 13's require careful budgeting and commitment over several years. Depending on the household income, only a fraction of unsecured debt will be repaid, allowing people to focus on their homes or other important collateral. Essentially, people going through a Chapter 13 are obligated to pay all disposable income toward their creditors, after allowable living expenses. Secured creditors, such as mortgage lenders, are paid first. This allows people who are behind on their house payments to focus on paying for their homes, rather than paying old credit card debt or other unsecured debt.
A: Once all fees are paid, the bankruptcy will be filed. Once filed, a Chapter 7 bankruptcy will go through the court system in a matter of months. A Chapter 13 bankruptcy lasts 3 to 5 years, during which time payments are made to the bankruptcy trustee.
A: Fees include a court filing fee of $299/$274 for Chapter 7/13, a fee to cover the cost of a credit report and two courses required under federal law for people going through a bankruptcy. Finally there is a fee for legal services in preparing the bankruptcy petition and court appearances. The legal services fee is negotiable and depends on the complexity of the case.
A: The basic premise of a bankruptcy is that people pay as much as they can to their creditors and that debt which cannot be paid is discharged. However, every state has laws allowing people to keep certain possessions through their bankruptcy--these laws are known as the exemptions. Florida law will apply if the debtor has lived in Florida for approximately two and a half years, otherwise the exemptions of the prior state will apply. Florida law allows for some protection of cars and other property, depending on the amount of equity a person has in their car or personal possessions.
A: Though ultimately beneficial, bankruptcies are very stressful. A small firm can provide individual attention and dedication to your case. Larger firms may relegate your case to assistants and paralegals and may be unable to get back to you when you have questions.
Attorney Eric A. Morgan has helped many people facing bankruptcy. To speak with one of our attorneys about your case, please contact us for a free consultation by calling (321) 253-6223 or by filling out our contact form.
The sooner we begin working on your case, the sooner it can be resolved.