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Navigating complicated bankruptcy rules

| Feb 11, 2019 | Bankruptcy Reform

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.

“My debt is different.” That is an idea many people have, and we find that it often affects their perception of bankruptcy. Of course, the statement is partly true: Every person’s finances are unique. However, as you would find during bankruptcy proceedings, the law typically sees debts and assets as categories and numbers, not as individual items. 

Furthermore, you are likely to find that each debt type has other categories within it. One example could be money you owe the government. Even though many tax debts are not eligible for forgiveness, bankruptcy could potentially forgive certain taxes.

We have seen many people express disbelief at some of the debt that qualifies for bankruptcy. Unfortunately, we believe there is a good reason for the skewed public perception of Chapter 7 and Chapter 13. The laws, classifications and regulations surrounding this type of financial relief are quite complicated at first glance. Furthermore, the 2005 bankruptcy reforms changed the rules considerably.

The extent of your success in applying for bankruptcy would typically depend not only on having a qualifying financial situation, but also on your understanding of the various categorizations of debts and assets. For more information, please navigate to the legal website.