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Miami Bankruptcy Law Blog

When bankruptcy is a good idea

Many Florida residents may worry about their finances, but they may think that bankruptcy is not a good option for them. However, there are times when people may want to think about bankruptcy.

Bankruptcy may be a good option in several circumstances. According to Lending Tree, bankruptcy can be a good idea if people are in danger of losing their home. If the bank forecloses on a house, people may find that their financial situation becomes even more difficult to deal with. People may also want to consider this option if they lost their job or if a family member has a serious illness. Sometimes people may try to pay back their debt in several ways and find that they are still behind on payments. In this situation, bankruptcy may be helpful. 

Navigate student loans after college

When Florida residents finish their college degrees, they may not realize how many loans they took out until they have to repay that money. Many students may feel overwhelmed when they think about making these payments. However, people may have more options than they realize.

It is important for students to know what kind of loans they have. According to NBC News, students might have private loans, federal loans or both. Different loans may have different terms and sometimes students may have different options for consolidating or refinancing these loans depending on the types of loans they took out. Some students may not qualify for loan forgiveness if they consolidate their private and federal loans, for example, so it is important to understand the nature of each loan before developing a repayment plan.

What should I know about payday loans?

Many services are offered as quick fixes for those who are experiencing financial hardships, especially those who are trying to avoid filing for bankruptcy. One such service is the payday loan. You may have heard about these loans. Perhaps you considered getting quick cash to pay your bills or took advantage of a payday loan in the past. You and other Florida residents should understand how payday loans work, as well as the high risks associated with them.

The National Consumer Law Center cautions against applying for payday loans, especially if you are suffering financially. Unfortunately, these quick, easy-to-obtain loans can be tempting for those in dire financial straits. In fact, payday lenders often target those who are desperate for money.

Can you protect your small business from bankruptcy?

Operating a small business in Florida presents you with unique challenges that should be strategically handled as they are encountered to utilize the competencies of your organization and implement optimal solutions. One challenge you may face is not having as large of a financial structure as a bigger company. However, if managed with care, you can take precautions to prevent missteps that could ultimately leave you signing bankruptcy paperwork.

Perhaps one of the more critical preventative steps you can take is to hire a financial expert who is solely responsible for managing the financial aspects of your company. This is not to say that you no longer need to be involved as you should regularly receive reports that show numbers and where the money is going in and out of your organization. However, with someone well-versed in financial practices at the forefront of your money management, you can confidently pursue day-to-day practices from a financial standpoint. 

Filing for bankruptcy can be a positive experience

When you are going through financial hardships, almost nothing can feel worse. At the law offices of Kingcade Garcia McMaken, we understand that Florida residents experiencing these problems can feel hopeless and frightened. The thought of filing for bankruptcy may also seem like an undesirable option, only to be considered when nothing else is working.

However, you may find solace in the knowledge that bankruptcy options exist to help you and others in the same situation find relief and future financial success. A young man who felt he had hit rock bottom shared his experiences. He explained to the Huffington Post that he began maxing out credit cards and accruing significant debt while still in college, since his job did not pay enough to support him or offer medical coverage. Like many other Americans, he assumed that his job after graduating would allow him to repay his debts.

What is forbearance?

Failure to make payments on your Florida property can lead to foreclosure on your mortgage and loss of your home. Obviously, this is not an outcome that you want to see happen. As a matter of fact, your mortgage lender does not want to foreclose on your mortgage either. Foreclosing on your property forces the mortgage lender to take a loss and saddles it with a property that it then needs to dispose of.

Therefore, if you contact your lender as soon as you are having difficulty making mortgage payments, the representative you speak to is usually willing to explore alternatives with you. One of these alternatives may be a forbearance. According to the Consumer Financial Protection Bureau, a forbearance is a temporary arrangement in which your lender either waives your obligation to make mortgage payments or reduces your payment amount. 

What is involuntary bankruptcy?

Many Florida residents, including yourself, may assume that filing for bankruptcy is a choice. In most cases, you would be right. However, what if you are informed that your creditors are petitioning for your bankruptcy? Can they do this?

As FindLaw explains, in rare cases creditors can request that those who owe them debts go through bankruptcy proceedings. You may wonder why this is permitted. In a Chapter 7 bankruptcy, eligible assets are liquidated to repay creditors. This allows them to regain a portion, if not all, of the debt that is owed to them. If a creditor takes no legal action and relies instead on sending bills and collection notices, the chances are higher that the debt will not be paid.

Can you prevent creditors from harassing you?

Florida residents like you suffer from debt for various reasons. When in debt, you may also battle with creditors or debt collectors. At Kingcade, Garcia, McMaken, bankruptcy attorneys, we can help you defend yourself against creditor harassment.

The first thing to be aware of is the Fair Debt Collection Practices Act (FDCPA). Under this act, consumers are protected from certain harmful and dangerous practices or behaviors potentially exhibited by creditors. This can include:

  • Calling at unreasonable hours
  • Communicating with you at work
  • Deceiving you or misrepresenting the situation
  • Repeated calling
  • Delivering threats
  • Using abusive language

What is lien stripping?

If you are a Florida homeowner facing financial difficulties that put you in the frightening position of possibly having your home foreclosed upon, you may wish to consider Chapter 13 bankruptcy as a way to prevent foreclosure. If you have both a first and second mortgage, Chapter 13 may likewise allow you to get your second mortgage discharged and any lien on your home having to do with that second mortgage stripped.

HomeGuides explains that second mortgage lien stripping is one of the options available to a Chapter 13 bankruptcy court.

What can you gain through credit counseling?

If you face overwhelming debt in Florida and think that nothing short of bankruptcy can save you, you may want to think again. While there is nothing morally wrong about filing bankruptcy, still it represents the option of last resort and you likely want to avoid it unless and until it becomes absolutely necessary.

Need Help Paying Bills recommends that you consider going through credit counseling before making the decision to file bankruptcy. According to a new study by the National Bankruptcy Research Center and the Management International Financial Education Foundation, credit counseling can help you resolve your financial problems and improve your credit report in as little as two years.

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