Tallahassee residents who are considering bankruptcy should remember that they are not the only ones. And that there is no shame in it. Every year, more than one million Americans file for bankruptcy. Financial hardship is the major cause of bankruptcies, not reckless spending. Personal bankruptcies in the United States are largely due to outstanding medical expenses. Other causes include job loss, unaffordable mortgages/foreclosure, and divorce. Yes, some people go bankrupt when they live beyond their means or accumulate too much debt. With the right Tallahassee bankruptcy attorney on your side, you can find a solution to your bankruptcy problems.
Whatever the cause of your bankruptcy consideration, Bruner Wright, P.A., will evaluate your situation and determine whether bankruptcy is the right course of action. Our goal is to offer you compassionate guidance that will help you make the right financial decisions. This blog will provide basic information about bankruptcy and discuss the pros and cons of filing for bankruptcy.
Understanding Bankruptcy Basics
As a component of bankruptcy, federal law provides individuals and businesses with relief from their financial obligations. The federal bankruptcy court grants an automatic stay to creditors when they petition it. This prevents creditors from pursuing debt collection. The bankruptcy judge and any related court proceedings will determine the best way to settle your bankruptcy debts. Creditors have a legal obligation to accept any payment, even none, that the court decides in the case.
Chapter 7 and Chapter 13 are the most common forms of personal bankruptcy. Also called “liquidation” bankruptcy. In Chapter 7, the court will essentially liquidate all non-exempt assets in order to clear as much debt as possible. Your home, primary vehicle, and retirement accounts (IRA) are exempt assets. Non-residence real estate, secondary investments, artwork, jewelry, and other investments are all considered non-exempt assets. To file a Chapter 7 bankruptcy, you must meet strict eligibility requirements regarding income levels and other factors.
Ineligible Chapter 7 applicants can file under Chapter 13. Another name for this is the wage earner’s plan. This plan is designed to assist people in repaying all or part of their debts through easing the payment terms. Moreover, Chapter 13 is similar to Chapter 7. It stops all debt collection actions, and prevents vehicle repossession and home foreclosure. Most Chapter 13 judgments require repayment plans to be made monthly for most debts. These plans allow you to discharge any remaining debts after you have made a successful repayment. This can be for three to five years. Failure to adhere to Chapter 13 payment terms could result in vehicle repossession or home foreclosure.
The Pros of Filing for Bankruptcy
Bankruptcy is a last-gasp attempt to preserve the life you have built and to keep valuable property (home and vehicle) that supports your lifestyle. Depending on whether you file under Chapter 7 or Chapter 13, there are different pros to filing for bankruptcy. First, creditors are prohibited from pursuing payment or other legal actions against your case while the court decides. This gives you the opportunity to determine the best course for rebuilding your financial future. The following bankruptcy pros are also worth mentioning:
- All or part of the debts can be discharged.
- Consolidation of your debts and creation of more manageable payments plans.
- Avoiding future legal action against you for unpaid debts.
- Protection from vehicle repossession and home foreclosure, whether for a long-term (Chapter 7), or a shorter-term (Chapter 13).
- Protect any retirement-related assets and other assets based on the filing.
- After the bankruptcy is over, you will be able to start restoring credit.
The Cons of Filing for Bankruptcy
Filing for bankruptcy is a last resort effort to preserve your financial life. However, your bankruptcy filings are not meant to resolve the financial problems you have. A Tallahassee bankruptcy lawyer can help you balance the pros of filing with the following potential cons.
- Your credit rating will be destroyed (even though it was likely already in decline).
- You will still owe debts, including student loans, mortgages, and alimony.
- If you do not follow court orders, you will most likely lose assets under Chapter 7 and possibly some under Chapter 13.
- If your job requires security clearances or involves handling financial transactions, it could affect your employment.
- A bankruptcy can remain on your credit report for as long as 10 years. This can lead to a number of financial-related problems.
Call Your Local Tallahassee FL Bankruptcy Attorney
Although bankruptcy might sound absurd to some, it can be difficult for people to find peace of mind when going through financial difficulties. But worry no more! Our dedicated team of experienced bankruptcy lawyers will give you security and calm during this stressful time.
Our Service Areas
- Tallahassee Fl
- Douglas Ga
- Brunswick Ga
- Augusta Ga
- South Georgia
- The Florida Panhandle
Bruner Wright P.A. can help you get a fresh start. To maximize the benefits of filing for bankruptcy, you should seek the guidance of an experienced Chapter 7 or Chapter 13 Tallahassee bankruptcy attorney. Contact us today!