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 a lawyer. This is because the process can be complex and overly technical for someone who lacks formal legal training.
While consumer filers may be granted an automatic stay against collection activity, a creditor can petition to overturn the stay. Typically, there is no stay against child support or spousal support. A court may agree to overturn a stay to allow a creditor to repossess an automobile or other collateral if there is reason to believe a debtor is intentionally damaging it.
People who earn a regular income may be eligible under Chapter 13 of the bankruptcy code. Under this chapter, creditors receive monthly payments over a period of from three to five years pursuant to a court-approved plan. There are eligibility requirements under this chapter that a lawyer can outline to a client during a discussion of the forms of debt relief that may be available.