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Miami Bankruptcy Law Blog

Qualifying for a mortgage following bankruptcy

A Chapter 7 bankruptcy may be the best option that Miami residents who are struggling with debt have at re-establishing themselves financially. Through the discharge of certain debts, filers are able to get out from under their many liabilities and be able to use utilize more of their personal resources to getting back on top of their money management. It is for this very reason why Chapter 7 remains the most popular form of personal bankruptcy (the American Bankruptcy Institute reports that through the second quarter of 2018, over 63 percent of all non-business bankruptcy filings fell under this chapter). 

Yet seeking bankruptcy protection is not a decision that should be made lightly, as doing so will inevitably impact one's credit rating. Many of those who are contemplating filing for bankruptcy will often ask how long it will take to rebuild their credit to the point of being able to borrow money again for large purchases (such as a home). Technically, one can qualify for a mortgage soon after their bankruptcy case is discharged if they have a large down payment. However, in such a situation, they would likely be saddled with an unfavorable interest rate, and if they indeed did have access to such funds so quickly, the chances of ever qualifying for a Chapter 7 bankruptcy in the first place would have likely been remote. 

Florida fourth in US for foreclosure troubles

An overall healthy national and global economy does not always guarantee protection from serious financial challenges for individuals. Many people in Florida know this through their own first-hand experiences. The problems can extend beyond credit card debt to mortgage delinquencies that put homeowners in jeopardy of losing their homes.

New data has been released by ATTOM Data Solutions that indicates Florida has the fourth-highest number of foreclosure actions among all states in the country. As reported by the Herald-Tribune, one out of every 487 homes has been scheduled for repossession by a lender, an auction or been served a default notice. The rate of these actions grew by 24% in 2018. Initiation of foreclosure actions in Florida spiked by 65%.

ABI calls for bankruptcy reform

People in Florida who cringe at the thought of opening their email or physical mailboxes for fear of seeing yet more demands for payment by creditors are not alone. The stress that excessive debt can put on consumers may feel overwhelming at times. Instead of being able to consider filing for bankruptcy as a way of getting out from under a mounting mound of debt, some people are left swirling with no real options. 

According to a new report recently released by ProPublica, some believe that the current bankruptcy code may well prevent access to bankruptcy relief simply because a consumer cannot afford to pay for the bankruptcy. It is ironic indeed to think that a person in need of debt relief is precluded from getting that relief because of an inability to pay for it. 

How to choose a credit counselor

If you are in debt in Florida, and you are unable to see a way out, speaking with a credit counselor is a good idea. Counseling can help you in a number of ways, including setting up a budget to get you out of debt. However, choose a credit counselor wisely, as some can add even more debt to your bottom line.

According to the Chicago Tribune, working with a credit counseling agency should not cost much money, if any at all. They are non-profit organizations whose goal is to help you manage your debt. Depending on your situation, a counselor may help you work through your monthly bills and create a budget to start paying down your debt. A counselor may deem it best to get you on a debt repayment plan, which means working with your creditors to extend the life of your loan and/or reduce interest rates.

Tips for rebuilding credit after bankruptcy

Filing for bankruptcy may be just what you need to do to get your finances in order and otherwise regain control over your affairs, but you can also count on your credit score taking a serious hit after you do so. At Kingcade Garcia McMaken, we are well-versed in the methods many people use to start rebuilding credit after bankruptcy, and we have helped many clients navigate this and many other bankruptcy-related matters.

According to NerdWallet, your credit score will likely fall somewhere in the range of the mid-500s following a Chapter 7 bankruptcy filing, and this holds true regardless of how your score looked prior to your filing. While a low credit score can make it difficult to obtain a loan, a credit card and the like, there are some things you can do after filing for bankruptcy to help boost your credit score more quickly.

When is Chapter 7 good for business liabilities?

The main reason many business owners file for bankruptcy in Florida is that they have personal debts intertwined with their business debts. If this sounds familiar, then you may want to file for Chapter 7 liquidation bankruptcy in addition to, or in place of, settling your business debts in other ways.

Many small-business owners may not use this option for a simple reason: They do not know it exists. This can lead to liability management strategies that are less than ideal. Here are some of the most common pitfalls of individual proprietors in high-debt situations.

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.

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