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Miami Bankruptcy Law Blog

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When bills keep piling up, you may feel overwhelmed and wonder how to survive today when you cannot seem to get past yesterday. Some Florida beachcombers who find themselves under a growing pile of debt can only blame their personal spending habits and uncontrollable use of credit cards.

But this is not you. You have managed a budget since you got money for chores as a five-year-old. Your spouse's unexpected layoff from the job plus the medical bills from last year's surgery have simply proven too much. What can you do?

Have you heard about HARP?

If you are a Florida homeowner facing debts that your income does not cover, you may think that bankruptcy is your only way out. Depending on your exact situation, you may be right. However, if your home is your largest asset and your mortgage payment is one of the biggest you make every month, you should check out HARP as a possible alternative to bankruptcy.

Mortgage Reports explains that the Home Affordable Refinance Program is a federal program established in 2009 to help homeowners such as you. In the past nine years, HARP has allowed over 3.3 million Americans to refinance their homes and reduce their mortgage payments, often by as much as 30 percent.

Florida payday loans may allow borrowers more cash, but at a cost

Payday lenders are a common sight in Florida, with a loan office seemingly at every other corner. Many residents take advantage of these fast, easy ways to get money when they are strapped for cash. However, borrowing from payday lenders might create more problems in the long run, for numerous reasons.

The Tampa Bay Times reports that a bill was approved at the start of the year, which if passed would allow Florida payday lending companies greater freedoms. Currently, residents can borrow up to $500 and are expected to repay the loan within 31 days. The new law would raise potential loans to $1,000 and give borrowers up to 90 days to pay them back. While those in support of the law say that payday loans are a good resource for people who have no other borrowing options, consumer protection groups claim the high interest rates and fees associated with payday loans are predatory and harmful.

Rebuild with courage after bankruptcy

Bankruptcy is no walk in the park. When Florida residents give in and liquidate their assets, it usually means they have exhausted all other possibilities and cannot see any other option. It may even feel like they have just stepped over the edge and may never recover a normal life again, but it does not have to be that way. 

Declaring bankruptcy does require some serious reflection. The individual or couple should think long and hard about the journey that led to the insolvency and work to correct any obvious missteps. If spending habits were out of control, for example, and credit cards were the back-up emergency fund, those habits will need to change. Financial counseling may be in order, too, to help get the involved parties back on the right track. 

What can credit counseling accomplish?

If you live in Florida and are finding it increasingly difficult to stay on top of your finances, you may be considering setting a meeting with a credit counselor. A credit counselor is someone who offers credit counseling, debt management or financial education services for consumers in need, and credit counselors often help people regain control over their finances or work through common financial obstacles.

Per NerdWallet, working with a credit counselor can be an effective, economical way to navigate some common financial problems and circumstances. For example, if you find yourself struggling with overwhelming debt, a credit counselor may be able to help you pursue appropriate debt relief options. He or she can also likely help you avoid hurting your credit score or falling victim to common scams while you work your way through your options. You may also find it beneficial to work with a credit counselor if you are looking to buy a home in the near future, or if you were unable to obtain a consolidation loan to help you take care of unsecured debt.

Dispelling common bankruptcy myths

There are a lot of misconceptions when it comes to filing for bankruptcy, and if you are one of many people across Florida considering taking this step, exercise caution when heeding advice from well-meaning friends or family members. Every bankruptcy situation is different, so what held true for your colleague, neighbor or what have you may not do the same for you. At Kingcade Garcia McMaken, we understand that there is a lot of false information out there when it comes to filing for bankruptcy, and we have helped many clients separate fact from fiction while navigating the process.

Among the most common misconceptions about bankruptcy, Nerdwallet reports, is a feeling that, by filing for bankruptcy, you are acknowledging a personal failure. The fact is, however, that the majority of bankruptcy cases come about in the first place because people find themselves struggling with unmanageable medical bills. Furthermore, the rising cost of health care has substantially outpaced wages, leaving even more people in need of debt relief options.

How do Chapter 7 and Chapter 13 bankruptcies differ?

If you, like many Americans, find yourself struggling with finances or drowning in overwhelming debt, you may be considering filing for bankruptcy as a way to get a fresh start. While you may be somewhat familiar with the terms "Chapter 7 bankruptcy" or "Chapter 13 bankruptcy," you may understand less about the difference between the two types of filings, or whether one type might be more appropriate for you than the other.

Additionally, not everyone may file for bankruptcy through Chapter 7, so it is wise to develop an understanding of the various options that exist for those seeking bankruptcy relief. To put it in simple terms, the American Bar Association notes that a Chapter 7 bankruptcy is essentially a bankruptcy liquidation, meaning you must surrender any assets deemed "nonexempt."

Credit counseling with a focus on the big picture

You might have started out with manageable debt in what seemed like some good investments, such as real estate or a small business. One bad turn led you to owing too much to your lenders. At Kincaid Garcia McMaken, we take pride in the fact that we have helped our clients make a fresh start through debt reorganization strategies, Florida bankruptcy counseling and repayment planning.

Once the bills start piling up and the creditors start knocking on your door, it might start feeling as though it is too late to fix your debt problem. Debt collectors often generate this feeling intentionally as a strategy to cause you to panic and make disadvantageous financial decisions. Stay calm, and you, like many of your neighbors, might be able to get out from under your crushing and debt with some planning and perseverance. 

E-book Announcement Timothy S. Kingcade

Miami Bankruptcy Attorney Timothy S. Kingcade is proud to announce the release of his new e-book, Restart Rebuild and Recover: Filing Bankruptcy in Florida. FREE to download on MiamiBankruptcy.com and TimothyKingcade.com.

It is a must-read for anyone considering filing bankruptcy in Florida.

Tips for those struggling with debt

Most Florida beachcombers do not plan to get covered up under a mountain of debt. Instead, the problem starts slowly. One of your credit cards becomes the fallback plan for emergencies, and little by little, a small, unpaid balance becomes a bigger one.

Before long, your first credit card is maxed out, and the bank offers a special transfer line-of-credit just in time to save the day. The only trouble is instead of transferring the balance and cutting up the old card, you keep the old account as the fallback emergency plan, and next thing you know, you are staring at the possibility of Chapter 7 bankruptcy. 

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