Families in Florida and elsewhere work hard to provide for their family. And when financial problems arise, this does not cause them to stop. Whether it is growing medical debt, unemployment or an accident, financial hardships can hit a family hard, sometimes causing them to seek out debt relief options. While filing for bankruptcy may be the last on one's list, the reality is that this might be the best option for a fresh financial start.
A previous post on this blog talked about how bankruptcy may be an important and even necessary step for Florida businessowners to take should they run into financial hardships.
This blog has discussed the difference between Chapter 13 and Chapter 7, which are the two types of bankruptcy most private residents of South Florida would file should they get into financial distress.
For people who are in financial duress but still hold a steady source of income, Chapter 13 bankruptcy is often the best form of debt relief. In a Chapter 13 bankruptcy filing, all the debts are combined, and the debtor makes regular payments to the bankruptcy case trustee to clear all debts. This method is known as the repayment plan and covers repayment of priority, secured and unsecured debts.
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.