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Miami Bankruptcy Law Blog

Know the truth about bankruptcy

Bankruptcy is often the option of last resort. When people become overwhelmed by debt to the point they are drowning in financial obligations; sometimes bankruptcy may be the only viable solution.

There are some common myths associated with filing for bankruptcy. Many people believe they will lose everything they own by pursuing this form of debt relief. In reality, the vast majority of Chapter 7 cases are no-asset cases. Filers don't often have to give up anything because they own so few assets.

Can you get a mortgage soon after a Chapter 7 bankruptcy?

If you plan to own a home in the future, the idea of going through a Chapter 7 bankruptcy now may seem absurd. Even though you're in debt, you don't want to totally ruin your credit score.

Don't let the fear of being unable to get a mortgage get in the way of the possibility of getting out of debt, though. Chapter 7 bankruptcy can be helpful in eliminating your debt and getting you on track financially. While it can be challenging to get a mortgage after one, it's not impossible.

How can you get rid of debt without bankruptcy?

Bankruptcy doesn't have to be the only answer when you're struggling with debt. There are many different ways that you can avoid bankruptcy, some of which you can start doing right away.

While there are dozens of options, the four main ways to avoid bankruptcy include:

  • Consolidating debts into payments you can afford
  • Taking on additional work to earn more
  • Settling debts with collection agencies
  • Use credit card insurance policies

How can you reduce what you owe when it's in collections?

When you get a call from the same number over and over again, you know that it is a collections agency. You've been behind on several bills, but you're also doing your best to catch up.

At this point, you've been fortunate enough that a family member has offered you $1,000 to settle your debts. You'll have to pay them back, but it should help you stop these calls. Unfortunately, you owe $2,000. What can you do?

Should you seek a mortgage loan modification?

If you're struggling to afford your mortgage, something that you may want to discuss with your lender is seeking a mortgage modification. A mortgage modification changes your current home loan and lowers the monthly payment.

Not everyone can get a mortgage modification, but if you can show that you are in a difficult financial situation or that your financial situation has changed, then they may be willing to work with you instead of having you miss payments.

Yay! Life! LLC files for bankruptcy

Sometimes, small businesses can't keep up with the demand for their services. Other times, they struggle to make enough money to keep their doors open. Regardless of the reason for a small business's struggles, if the business can't stay profitable, the owner may want to consider filing for liquidation bankruptcy.

That's what the sticker maker Yay! is doing now. Yay! Life! LLC has been producing stickers, refrigerator magnets and car magnets for years, but it claims it now owes $183,546 to creditors and has only $31,391 in assets. The company, which was founded in 2010, was created to celebrate all things that made people say, "yay!" in life. The company produced key chains, bumper stickers, and more. It was even featured in Oprah Magazine.

Debt in America: A problem across generations

Right now, Americans are in debt at an amount of approximately $14.1 trillion, based on the 2019 Consumer Debt Study by Experian. That number is made up of debt from credit cards, student loans, auto loans and mortgages. On average, each American carries a personal debt of around $90,460.

Who carries the most debt in America?

If foreclosure is looming, consider bankruptcy

You love your home, but you've really struggled to make payments on time. Your mortgage went up when your property values started to increase, and that increase in your mortgage took a toll on your budget. Where you used to pay $900 a month, you now have to try to come up with $1,200. It's a big jump.

While an increase does mean that your property's value is higher than in the past, it has still put a major strain on your finances. You've already missed one mortgage payment, and you don't want to put more stress on yourself by missing another. What should you do to stop foreclosure?

Chapter 7 or 13 bankruptcy could be a way out of your debt

Debt relief may be something you're looking into if you've lost time at work or lost your job recently. Having great amounts of debt can make it hard to get your finances back on track when you're only able to work part time or find piece work to bring in an income.

One amazing idea for getting your debts under control could be bankruptcy. If you've tried consolidating your debts, negotiating with creditors and taking other steps to pay what you owe but have had no luck, then a bankruptcy can be a good choice.

Want to avoid bankruptcy? These 3 tips could help

You have always been good with your money, but when you lost your job during the recent economic downturn, you were suddenly put in a frustrating, position. You had enough money to pay your bills, and unemployment helps you cover the essentials. Unfortunately, you don't have enough to pay down your debt or make all of your minimum payments on time.

This is not a unique story, so it's important for you to know that there is help for people like you in this situation. Bankruptcy is one possibility, but it's not the only one. Here are three other options you may want to try before turning to bankruptcy to get out of debt.

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