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Fort Lauderdale Bankruptcy Law Blog

Should I file for divorce or bankruptcy first?

Among all of the many difficulties that accompany the prospect of divorce, concerns over personal finances are often at the forefront of people’s minds. If you are currently considering ending your marriage, and you and/or your spouse have a considerable amount of financial debt, it can be incredibly helpful to know how filing for personal bankruptcy early could affect your divorce case.

Your Divorce 101 discusses the pros and cons of filing for bankruptcy prior to divorce, and explains that there are several benefits to pursuing debt relief early. For one thing, filing for bankruptcy as a couple is cheaper than filing individually, and doing so ensures that you are not held liable for any of your spouse’s outstanding debts once your divorce is finalized. If you and your husband or wife incurred a significant amount of credit card debt during your marriage, for instance, the credit lender could pursue you to pay the balance even if your divorce settlement specifies otherwise.

An introduction to the CARD Act

No matter their credit history or limit, credit card customers across the state of Florida and the entire nation have rights as consumers. Unfortunately, however, many people are not familiar with federal guidelines mandating credit card practices and consumer protections. Learning a little bit about the Credit CARD Act can go a long way to ensure that one’s rights as a consumer and borrower of credit are legally safeguarded at all times.

The Consumer Financial Protection Bureau explained that the Credit Cardholders Bill of Rights, otherwise known as the Credit CARD Act, was enacted by President Obama in 2009. The federal legislation features two primary objectives: transparency and fairness. The primary provisions of the law mandate that credit card fees and rates be easily accessible to consumers. They also prohibit exploitative or biased practices on the part of credit lenders. Abusive practices could include but are not limited to imposing over-limit penalties on accounts or dramatically increasing the interest rate on a credit balance.

Protecting yourself from creditors through bankruptcy

It’s possible that you have been suffering through an endless barrage of creditor harassment and that you know very well just how difficult it can be to live your life when you have to sift through hundreds of threatening phone calls and letters. Here at Nowack & Olson, we understand that you would like to escape this cycle and can provide you information that you could use to help yourself out of the harassment zone through bankruptcy.

The first hurdle that you may face is the idea of bankruptcy and how scary it may seem. However, it is a helpful option both in stopping creditor harassment and in providing you with a smoother road to financial recovery. You may find that your fears are unfounded anyway. For example, while property loss is a high concern for many, there are actually very few cases in which a person loses all of their property. While the majority of loss is dictated by whether you file for Chapter 13 or Chapter 7, neither tends to be particularly damaging.

Two Florida cases prompt Supreme Court consideration

Florida residents continue to be confronted by serious financial challenges, despite the fact that there is evidence to suggest that the nation’s economy is beginning to recover from the recession. As a result, foreclosure and Chapter 7 bankruptcy are a very real prospect for many. And given that the state’s real estate market has not yet fully stabilized, many homeowners and lenders alike have major concerns about how to address underwater mortgages.

According to one source, Florida has the second-highest rate of underwater mortgages in the nation, equaling more than one quarter of all mortgages in the state. That is why Bank of America is hoping that the U. S. Supreme Court will offer clarity and consistency to how to address underwater second mortgages in chapter 7 bankruptcy cases.

The role of the bankruptcy trustee

We here at Nowack & Olson, P.L.L.C., understand that many people are discouraged from filing for Chapter 7 bankruptcy because they are uncomfortable with having their personal finances and financial difficulties scrutinized. You, like countless other Florida residents, may not be familiar with the role and/or duties of a Chapter 7 panel trustee. That is why it can be helpful to learn more about who Chapter 7 trustees are and what they do before moving forward with bankruptcy proceedings.

The National Association of Bankruptcy Trustees explains that a Chapter 7 panel trustee is a private citizen randomly chosen and appointed by the U. S. Trustee division of the U. S. Department of Justice to handle Chapter 7 bankruptcy cases. It is estimated that around one million Chapter 7 bankruptcies are administered annually by the some 1,000 active panel trustees across the country, and that one trustee is capable of administering hundreds of cases each year.

Will I lose my home in bankruptcy?

Once Miami, Florida, residents are at the point of considering filing for personal bankruptcy they are often already facing the prospect of losing their home to unmanageable debt. If you are a homeowner who is currently weighing your debt relief options, it can be helpful to know what may happen to your house in bankruptcy proceedings.

In order to understand how real estate property is addressed through personal bankruptcy, it’s important to recognize how Chapter 7 and Chapter 13 bankruptcy differ. The Nest explains that filing for Chapter 13 bankruptcy does not involve the liquidation of assets in order to pay creditors. As a result, the equity of your home would not be a factor in your case if you were to file under Chapter 13.

Personal bankruptcy and credit card debt

Credit card debt is a major issue for countless people across the state of Florida and the entire country. And while filing for personal bankruptcy is one option that people often turn to for effective debt relief, it’s important that they understand if and how bankruptcy will address their credit card-related debts and difficulties.

The Nest explains that filing for Chapter 13 or Chapter 7 bankruptcy can affect the way that credit card debt is discharged. For instance, people who file for Chapter 13 may still be required to pay a portion of the credit card debt that they owe, while those who file for Chapter 7 may not be held liable for repaying any of the amount due. Similarly, the effectiveness of bankruptcy in eliminating credit card debt can depend largely on whether or not that debt is considered dischargeable at all.

Are debt collectors really allowed to do that?

Being contacted by a debt collector can be an extremely disturbing experience, as it is often a sign that you are facing serious financial challenges. And while having any kind of contact with collection agencies can be uncomfortable, you as a consumer can actually find yourself subject to illegal collections practices. That is why it is so important to be able to recognize improper debt collector conduct when it occurs.

Chapter 13 bankruptcy considerations

Having served the residents of Florida for more than 15 years, we here at Nowack & Olson PLLC understand how difficult it can be to choose the most appropriate form of debt relief for your unique situation. Chapter 13 bankruptcy is known to be one effective personal bankruptcy option, and is distinguished from Chapter 7 bankruptcy by several key factors.

Both Chapter 7 and Chapter 13 bankruptcy are capable of discharging unsecured debts, such as credit card debt and other personal loans. However, filing for Chapter 13 can allow you to maintain ownership of certain kinds of property, while still lowering the amount that you owe on those loans. For instance, you may be able to keep your car and/or house once those loans are adjusted through bankruptcy to lower your monthly payments.

Personal bankruptcy case results in accusations of fraud

The vast majority of people that consider filing for bankruptcy in Florida take the decision very seriously and only file after they have exhausted other options. Unfortunately, however, there are instances where people attempt to take advantage of the debt relief system. Bankruptcy fraud is a major offense that can result in serious legal penalties.

One woman was recently charged with two offenses relating to bankruptcy fraud. She was accused of third-degree theft for failing to properly declare funds in her bankruptcy filing, which could result in a monetary fine of $150,000 and a prison sentence of up to five years. The other charge is fraud in insolvency in the second degree. That conviction could be accompanied by similar monetary penalties and a prison sentence of 10 years.

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