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Eliminating the Confusion: What Can Bankruptcy Really Do for Me?

Posted on in Bankruptcy

Surfside bankruptcy attorney

The thought of filing for bankruptcy typically only comes to mind when it is your only option. Rarely do people fully understand what filing for bankruptcy entails and what this financial decision can actually do for you. Filing for bankruptcy is much more common than you think, and contrary to popular belief, it does not leave you financially destitute. Before you make a decision regarding your financial situation, it is important to have a true understanding of what this legal process will do for you and be aware of the common misconceptions associated with bankruptcy.

The Types of Bankruptcy

You have two different options when filing for bankruptcy, known as Chapter 7 and Chapter 13, and depending on your financial situation, you will qualify for one or the other. Chapter 7 bankruptcy is also known as “liquidation bankruptcy” because some of the filer’s assets can be sold to repay their outstanding debts. Once this is complete, the remaining debts will be discharged. This form of bankruptcy is reserved for those who earn less than the median income for the state of Florida. Those above this financial level will file for Chapter 13 bankruptcy. In Chapter 13 bankruptcy, the filer will propose a repayment plan to pay off their debts within a three- to five-year period. It is always advisable to turn to a bankruptcy attorney before beginning the filing process to ensure that you do indeed qualify for that particular chapter.

The Truth About Bankruptcy

Before deciding whether or not bankruptcy is right for you, it is important to recognize that the process may make it possible for you to do the following:

  • Eliminate your legal obligation to pay most or all of your debts. This is known as having your debts “discharged” to provide the filer with a fresh start.

  • Put a stop to the foreclosure process and allow you to cure a default. 

  • Prevent the repossession of certain assets, such as your car or other forms of personal property.

  • Put a stop to wage garnishment and debt collection harassment.

  • Prevent the termination of your utility service or reinstate the service if it has already been terminated.

  • Create lower monthly payments on certain debts, including mortgages or car loans.

Common Misconceptions About Bankruptcy

There are a number of falsehoods surrounding bankruptcy, such as the process will leave you broke or the process eliminates all of your debts and does not require repayment. The following are common misconceptions that you should be aware of:

  • While bankruptcy can force secured creditors to take payments over time, certain creditors are granted protection from other modifications of the loan terms.

  • Bankruptcy will not discharge every debt that you have accumulated, including alimony, child support, student loans, criminal fines, and most taxes.

  • Filing for bankruptcy will not relieve co-signers of their obligations to repay their portion of the loan.

  • Once you have filed for bankruptcy, any further debts that you incur will not be dispelled.

Contact a Broward County Bankruptcy Lawyer

Filing for bankruptcy can look a little different for everyone, so it is important to be aware of which type of bankruptcy you qualify for and what the process will actually do for you before starting the filing process. The best way to ensure that you are fully informed on the road ahead is to discuss your financial situation with a reputable bankruptcy lawyer who can guide you in the right direction. Attorney Elliot can provide you with the legal help you need from the beginning to the end of the bankruptcy process. With nearly two decades of experience, he can assist you with filing for either Chapter 7 or Chapter 13 bankruptcy and lead you down the path to financial recovery. Contact our accomplished Fort Lauderdale, FL bankruptcy attorney at 754-332-2101 today.

 

Source: https://www.floridabar.org/public/consumer/pamphlet008/

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