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Bankruptcy and small claims in Florida

When the dollar amount of a claim is under a threshold set by a jurisdiction, it will be settled in small claims court. If a creditor or another party wins a judgment against an individual, that individual must pay that amount or risk wage garnishment. However, it may be possible to eliminate that judgment by filing for bankruptcy.

Individuals who file for Chapter 7 bankruptcy are saying that they don’t have enough money or other assets to satisfy the debt. It is then discharged, which means that the debtor is no longer obligated to make payments. Whether or not a debt is discharged becomes a little murkier if an individual files for Chapter 13 bankruptcy. Unlike a Chapter 7 filing, a Chapter 13 filing merely reorganizes debt that is then repaid over a three or five year period.

Prior to filing for any type of bankruptcy, it is important to consider the size of the judgment in relation to other debts. Those who have no other debt and a small judgment to repay may have better options than filing bankruptcy to take care of the debt. Furthermore, it is important to consider that the cost of bankruptcy could be as high as $2,000, which may be more than the judgment itself.

In some cases, bankruptcy may represent a fresh financial start for debtors. It may be possible to have debts eliminated or reorganized to lower monthly payments and possibly prevent foreclosure. a lawyer may be able to talk more about the other benefits of bankruptcy such as the fact that all creditor contact must cease when a case is filed.

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