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Fort Lauderdale Bankruptcy Law Blog

Understanding bankruptcy in Florida

While some from of bankruptcy has existed since Roman times, the first permanent United States bankruptcy statute wasn't established until 1898. Debtors' prisons existed until the 1840s, but the Supreme Court said that such an arrangement violated the Constitution. At first, bankruptcy laws were designed to protect businesses. However, individuals may also find relief from debt by filing under certain chapters.

It may be in the best interest of both a debtor and a creditor to settle a debt outside of bankruptcy court. This is because it can be faster and less expensive to resolve the matter as well as easier to come up with a creative solution without a court order. In the event that a debtor does decide to file for bankruptcy, it is better to do so with an attorney. This is because the process can be complex and overly technical for someone who lacks formal legal training.

When bankruptcy makes sense

For some Florida consumers, bankruptcy is an effective method of debt relief. However, there are steps that need to be taken prior to filing. First, people may want to look at their budgets to get a better idea of their spending habits. If there is nowhere to cut spending to allocate more toward outstanding debt, bankruptcy may be the best option.

The two primary forms of consumer bankruptcy are Chapter 7 and Chapter 13. Under Chapter 7, the debtor's non-exempt assets are liquidated with the proceeds used to pay off creditors. There is a means test that must be satisfied before an individual is allowed to file under this chapter. In addition, people who have filed for Chapter 7 bankruptcy in the past eight years are generally not eligible to receive a debt discharge.

Can I file for Chapter 13 bankruptcy protection?

Being in debt is a devastating situation that too many people in the U.S. struggle with every day. If you are one of the people who spend your days concerned about unpaid bills and harassing creditors, you should know two very important things: you are not alone and you have options to address your situation.

One such option is to file for bankruptcy protection. As an individual, you have the option or filing for Chapter 7 or Chapter 13, which can each be effective but serve different purposes. Further, not everyone qualifies for both types of bankruptcy. In this post, we will look at the eligibility requirements for Chapter 13 bankruptcy.

Legal action against homeowners uneven, varied

Readers of this blog should already realize that every case involving debt, bankruptcy and/or foreclosure is different. However, too many people still make the mistake of thinking that if their situation is similar to someone else's, their outcome will be similar as well. That can be a costly misconception.

For example, people who lose a home in foreclosure can face legal proceedings to collect an outstanding mortgage balance. However, this process will look different for every person.

What are my options when dealing with student loan debt?

Though the economy is on a significant rebound since our last recession, many people are still struggling to find a place in the job market. Having the hardest time are recent graduates who are running into the old dilemma: employers want you to have 1-5 years of work experience for an entry-level job right out of college.

As you can imagine, this quandary forces recently graduated college students to oftentimes accept lowering paying jobs in order to pay the bills. If they're like most college students across Florida and the United States, much of their money goes toward paying their student loan debt. But low pay and massive amounts of student loan debt don't always mix, leaving a lot of recent graduates asking this age-old question:

4 things to do to avoid or pay down debt

When faced with debt of any amount, it's easy to become overwhelmed. In an overwhelmed state, we often fail to take action because no action seems big enough to deal with the problem. With debt, however, the little actions you take can build up to a big solution. Here are four actions you can take to help your debt situation.

First, when you leave your house, don't take credit cards with you. Credit cards can be good tools for emergencies or for travel, when you don't want to link spending to your bank account. But they aren't great tools for normal shopping and dining expenses, because they make it easier to overspend. Instead, take cash.

Why does Chapter 13 take longer than Chapter 7?

Before filing for bankruptcy, it's important to note that Chapter 13 bankruptcy isn't as quick as the most common type, which is Chapter 7. With a Chapter 7 filing, if all goes as planned, you could be done in a few months. With a Chapter 13 filing, you may not be done for five years. Why is there such a big difference?

To understand why, you just need to know the difference between Chapter 7 and Chapter 13 at the base level. With Chapter 7, assets are auctioned off or liquidated, proceeds are sent to the lender and the debt that remains is forgiven. With Chapter 13, assets are generally retained, a repayment plan is created and then payments are made until the debt has been paid off, not forgiven.

Man who filed Chapter 13 sues over continued collector harassment

Once people make the difficult decision to file for bankruptcy, they often feel a sense of relief that they've taken some control over their debt situation and will no longer be constantly harassed by debt collectors. Not all collection companies, however, play by the rules.

An Illinois man has filed a federal lawsuit against a debt collection company. In the suit, he alleges that the company violated the Fair Debt Collection Practices Act. According to the suit, he and his wife filed for Chapter 13 bankruptcy in 2014 and invoked automatic stay protections that should have stopped any collection attempts. However, the company that had taken over his car loan attempted to collect what he owed once it learned of his bankruptcy.

A sudden jackpot doesn't always solve your problems

When facing severe debt, it's common for individuals to daydream about a sudden windfall that saves the day. All you need to set things right is a bit of an inheritance or a small lotto win. Concentrating on the possibility of such a windfall -- which is an unlikely event -- often means individuals don't concentrate on the legal and financial actions that could make a true difference in the situation.

Even if you do receive the windfall you believe might solve all your problems, there's no guarantee that life will be better. In fact, the nation is full of stories about lottery winners who ended up worse off emotionally and even financially after winning.

Is it OK to have a late payment with Chapter 13 bankruptcy?

You've been approved for Chapter 13 bankruptcy, and you've even made some payments, but things just don't work out one month. You don't have the capital you need to make the payment or you simply forget to make it. Either way, you miss the payment and you're going to be late. Now what?

Generally speaking, you can still make the late payment and everything will be fine. That's not to say that this is true in every case or that you should make a habit of it, but it tends to be all right.

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