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Fewer Florida Consumers filing for Bankruptcy in 2018


Recent statistics from the American Bankruptcy Institute are good news-bad news for Florida residents. The good news? Consumer bankruptcy filings are 8% lower in March 2018 than they were in 2017, suggesting that the strengthening economy has allowed consumers to manage their debt. The bad news? Filings in March were up 31% over February. Whether the increase is temporary or the sign of a worsening problem remains to be seen.

Jobs Market—Up or Down?

One key factor in whether consumers file for bankruptcy is whether they have a job. The jobs market remained healthy throughout 2017, but the most recent report might indicate softening.

According to the Labor Department, only 103,000 jobs were created in March. This represents a major pullback from the month before, when over 300,000 jobs were created. Though experts continue to argue that the economy’s fundamentals remain solid, the recent slowdown in job creation is concerning—especially for consumers who are already feeling stretched.

Consider Your Options

If you are struggling with credit card and other debts, you should consider your options. Bankruptcy affords consumers a fresh financial start by eliminating certain unsecured debts. With these debts out of the way, many of our clients are able to pay their other bills, including rent/mortgage and car payments. Generally, consumers have two bankruptcy options: Chapter 7 or Chapter 13.

With a Chapter 7, consumers can eliminate unsecured debts like:

  • Medical debt
  • Credit card debt
  • Personal loans
  • Some court judgments

The Chapter 7 bankruptcy process is quick, and you can complete it within a few months. You file a petition and supporting documents with the bankruptcy court. Once approved, all qualifying debts listed on the petition are wiped out.

With a Chapter 13 bankruptcy, you come up with a payment plan which lasts 3-5 years. Based on your income and expenses, you pay as much as you can to unsecured creditors and any remaining balance gets wiped upon completion of your plan.

Which Bankruptcy is Right for You?

To qualify for a Chapter 7, your income cannot be too high. To check eligibility, you will need to compare your income to the median income for a family of your size in the state. If it is below the median, then you qualify. However, those over the median might also qualify if they have large expenses. An attorney can help you check whether you meet the income test for Chapter 7.

Apart from whether you qualify for a Chapter 7, you also need to analyze your assets. In a Chapter 7, the bankruptcy trustee can sell assets and use the proceeds to pay creditors. This means you could lose your car if it has too much value in it. Generally, your homestead is exempt; however, vacation or income properties could be sold.

Call Nowack & Olson for a Free Consultation

Deciding to file for bankruptcy is a complex issue. You should not make it alone. Instead, call the bankruptcy lawyers at Nowack & Olson in Plantation today to begin the process of planning for a bright financial future. Call 866-907-2970.




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