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Fort Lauderdale Bankruptcy Blog

Chapter 13 bankruptcy: Who all are eligible to file?

Individual bankruptcies are usually filed under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. As many readers in South Florida would know, a Chapter 7 bankruptcy filing requires the debtor to liquidate assets in order to repay the debts. This is a bankruptcy option for those individuals who do not have a steady source of income. The liquidation of assets allows them to repay debtors and make a fresh financial start.

A Chapter 13 bankruptcy filing, on the other hand, is suitable for those individuals who have a steady source of income and a relatively lesser debt to repay. It must be mentioned here that Chapter 13 does not involve the liquidation of any of the filer's assets. In this mode of bankruptcy, all the debts are consolidated and the filer needs to repay that amount through monthly payments over a period of three or five years, as may be determined suitable by the bankruptcy court based in the debtor's circumstances.

Planning bankruptcy filing? Try other debt relief methods first

Financial challenges arising out of accumulated debt are sometimes so overwhelming that many people find it difficult to cope with the pressures and force themselves into filing for bankruptcy. Bankruptcy is definitely a foolproof way of eliminating debt but a person should consider a bankruptcy filing only after exploring the other debt relief methods that are available. In fact, the Federal Trade Commission strongly recommends that people try various debt relief methods before they decide to file for bankruptcy.

As the FTC suggests, a good way to begin debt relief efforts is to talk to creditors and try to put in place a modified repayment plan. In order to achieve a favorable result in these negotiations, debtors can seek help from credit counsellors or debt relief attorneys who, in turn, would represent you while engaging in discussions with the creditors. The usual result of these discussions is a monthly debt repayment plan that the debtor needs to adhere to. Another way of obtaining debt relief is by taking out a second line of credit. However, one needs to remember that in most such cases, one's home is kept as collateral.

Some debts that remain after Chapter 7 bankruptcy discharge

Newspapers and TV channels across the country often carry news about the debt crisis that is so prevalent in America. There are many people in South Florida too who are in the same situation. Some of those people may be planning to file for bankruptcy, or have already filed for bankruptcy, under Chapter 7 of the United States Bankruptcy Code. According to the rules of this chapter, all the assets of a debtor, except certain exemptions, are liquidated and the money raised from the liquidation is used to repay creditors.

A Chapter 7 bankruptcy is often the preferred option for debtors who do not have a steady source of income, and once those debtors complete the Chapter 7 bankruptcy process and obtain discharge from the bankruptcy court, those debtors do not have any further personal liability for most of the debts. The Chapter 7 discharge also ensures the end of all credit collection efforts. However, it is important to remember that there are certain debts that remain even after a Chapter 7 bankruptcy discharge.

Is Bankruptcy an Option You Never Considered?

 

As a law firm focused on helping individuals understand their legal rights under Chapter 7 and Chapter 13 of the bankruptcy code, one of the recurring remarks we hear is that people never thought they would utilize this option. In fact, a recent article addressed this very sentiment.

Do you need to file bankruptcy but are afraid you won’t recover?

To live in America without debt is fairly atypical. We finance our homes, vehicles, degrees and often, daily necessities. But what may seem like normal, financial gain can become overwhelming when you realize your paycheck no longer covers your minimum payments toward what you borrowed.

In some circumstances, filing bankruptcy may be your best option to regain control of your financial situation. Yet, you might hesitate to file out of fear that you won’t recover. However, there are certain things you can do to reestablish yourself after bankruptcy.

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