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Miami Bankruptcy Law Blog

How is Chapter 13 different than Chapter 7?

If you are like a lot of people facing serious financial struggles in Florida, you might not know that you have a choice when it comes to which type of bankruptcy plan might be able to help you get out from under your mound of debt. There are actually two common forms of bankruptcy available to consumers and each has times when it may be the better option.

As explained by Experian, a Chapter 7 bankruptcy offers debtors a relatively expedient path to debt discharge as it can generally be completed within a matter of a few months. This type of bankruptcy plan may also involve the loss of assets related to any secured debt. A secured debt is any debt that has some type of property associated with it as collateral. Homes, vehicles, boats and more may be taken and sold in order to repay the creditors. No such asset loss occurs for unsecured debts like credit card debt or medical bills.

How can I recover financially from a divorce?

Along with the emotional upheaval, many divorcing couples in Florida also experience financial issues after their separation. Whether you're the custodial or non-custodial parent, it's likely that your situation will change drastically once the ink has dried on your divorce decree. If so, Entrepreneur offers the following tips on how to bounce back from financial losses.

Perform a financial inventory

What can bankruptcy�s �automatic stay� protect you against?

As a Florida resident facing mounting debt, you may feel as if you spend the majority of your day dodging creditors and fielding threats. You may, too, be considering filing for bankruptcy in an attempt to get your financial affairs back in order. Should you decide to move forward with the process, you may be able to obtain temporary protection from creditor harassment through something known as "automatic stay."

According to LendingTree, an automatic stay is something that takes effect as soon as you begin your bankruptcy case, and it can provide you with temporary relief from creditor harassment while your case is ongoing. Essentially, the automatic stay prevents your creditors from trying to collect on your debts while you work through the bankruptcy process, but this protection period ends when either your debts undergo discharge, or when your bankruptcy case officially closes.

Bankruptcy after the birth of a child

New parents may be very excited to welcome a child into the world, but they may also be going through a number of hardships, including financial strain. From pregnancy-related costs to job loss and other financial matters, there are many reasons why new parents may struggle with debt. In fact, some may have been in debt for years. Unfortunately, these financial hardships can cast a shadow over a time that should be very special and hopeful, and it is important for parents who are struggling with debt to have a clear idea of different options that may be open to them.

First, it is critical for parents to have a solid understanding of the different types of bankruptcy and compare these options with their personal circumstances. Some may decide to file for Chapter 11 bankruptcy, while others may benefit more from Chapter 13 or Chapter 7. It is also essential to move forward with bankruptcy in a timely manner and do everything to protect the financial future of the family. Raising a child can bring a number of financial demands, from buying groceries and moving into a bigger home to helping a child with college years down the road. It is vital to be prepared for these obligations and ensure that financial concerns are addressed.

To avoid bankruptcy, try negotiating with your creditors

Florida residents suffering under debt do not have to see bankruptcy as their only option. In fact, relief can be as simple as talking to your creditors directly about your situation. Money Crashers explains that there are many lenders who are willing to discuss your debt with you and make adjustments in your favor. You can work out a payment plan that is not so burdensome and takes into account your current financial status. Some lenders will also give you lower interest rates on your payment plans.

Depending on the lender, you might find some kind of hardship program or provision that can help you out. If your mortgage payments are burdensome, check to see if your lender has a loan modification program that you qualify for. If student loans are weighing you down, look for hardship programs that can reduce your payments. You might be able to link your payments to your current income level, or you could briefly suspend your payments with forbearance or deferment.

Understanding credit counseling

Residents in Florida who are experiencing debt challenges may often not know where to turn. Some people immediately think bankruptcy is their only option while others may even be too afraid to seek any type of help at all. While bankruptcy may be the right option for some people, it does not mean that it is the only solution to debt problems. Consumers may find that working with a credit counselor can offer the assistance they need.

As explained by the Consumer Finance Protection Bureau, a credit counselor can help consumers develop and manage a budget, obtain and review their credit scores and make a plan for their repaying debt.

Filing taxes after filing for Chapter 7 bankruptcy

In order to achieve a fresh start after filing for Chapter 7 bankruptcy, it is important for people in Florida to stay current with their financial obligations, during and after their cases. This includes filing their taxes on time and paying any applicable liabilities. Failing to do so could have serious implications on their cases, as well as on their financial futures.

According to the Internal Revenue Service, once their Chapter 7 bankruptcy cases have commenced, people are required to file their tax returns or get an extension before they come due. If they do not, their cases may be dismissed. Consequently, they would resume liability for their debts and any stayed collection efforts could begin again.

Navigating complicated bankruptcy rules

When you are saddled with debt, it may not seem like you have a lot of good options. Here at Kingcade & Garcia, P.A., we recognize that people are often under a great deal of stress by the time they come to our Florida offices looking for bankruptcy advice.

This distress is one of the reasons we attempt to approach every new case with compassion and detail-oriented attention. Part of this initial work often involves us attempting to dispel some common myths about bankruptcy. Here is one especially popular misconception.

Could bankruptcy save a house?

You are not alone if you have some concerns about bankruptcy. Many people in Florida worry about the process before they begin. More often than not, they are unsure of what they might lose.

Bankruptcy is a serious debt relief option that could have some negative sides, depending on your situation. However, it is also a system with the sole purpose of helping you get your life back on track after unmanageable debt. Therefore, you could be able to keep certain essential assets if you file for Chapter 7.

Possible alternatives to filing for bankruptcy

As someone who lives in Florida and has a financial situation that has become too much to handle, you may be working through your options and trying to decide whether filing for bankruptcy might help you get the fresh financial start you need. While, for some people, filing for bankruptcy can be a great first step toward rebuilding your finances, the process is not necessarily for everyone, and it may serve you well to explore other options before making your decision. At Kingcade Garcia McMaken, we are well-versed in both the bankruptcy process and bankruptcy alternatives, and we have helped many people figure out what option might best fit their needs.

According to CreditCards.com, one avenue you may want to consider taking as an alternative to filing for bankruptcy involves trying to negotiate with your creditors in an attempt to make your debt more manageable. You may be able to contact your creditors directly to negotiate a lower payoff amount than you owe, or you may be able to work with a debt settlement agency to have representatives from it advocate on your behalf.

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