Following the financial crisis, bankruptcy filings rose, and many people turned to bankruptcy for a fresh financial start. Contrary to popular belief that bankruptcy will ruin your financial future, the truth is that in many cases, filing for bankruptcy is the best thing you can do to start improving your finances.
If you are struggling with crippling debt in Florida and fear that there is no way out, do not despair; you do have options. Here are a few tips about filing for bankruptcy in Florida that can help you better understand how bankruptcy works and how to proceed.
Determine the type of bankruptcy that suits your situation
There are different types of bankruptcy that apply to different types of financial situations. It is important for you to understand which type of bankruptcy filing is most suitable for your particular situation, as well as the benefits and potential consequences of each type.
If you have a steady income and could feasibly pay off a portion of your debts each month, you may wish to consider a Chapter 13 bankruptcy. This type of bankruptcy is typically known as debt reorganization and allows you to keep your assets (such as your home) while you work to pay off your debt in a restructured way under your bankruptcy filing.
A Chapter 7 bankruptcy, on the other hand, allows you to discharge your debts for a fresh financial start. In Florida, a Chapter 7 bankruptcy takes about 90 days from start to finish, in most cases. Common debts in this type of bankruptcy filing include credit card debt, medical bills and certain types of tax debt.
Filing bankruptcy can help your situation
A bankruptcy filing shields you from any types of adverse actions by creditors. For example, harassing phone calls are no longer permitted, and your wages cannot be garnished once you have bankruptcy protection. In addition, because you are taking legal action to resolve your debt, your credit score will no longer decline month by month as you continue to miss payments. So despite common conceptions about bankruptcy, in many cases, filing for bankruptcy is a positive first step towards an improved financial future.