Articles Posted in Bankruptcy

Wood blocks spelling small business and a cup of coffeeThere are more than 2.4 million small businesses in Florida, employing more than 3.2 million people. If you are one of them, you might be wondering if bankruptcy is an option to reduce your debt. Depending on how your business is legally categorized, you’ll be able to file a Chapter 7, 11, or 13 case. An experienced bankruptcy attorney in Jacksonville can help you determine if bankruptcy is your best alternative. Because Florida is a homestead exemption state, there may be some other things to keep in mind as well. Each of these can have different effects on your business.

What Types of Bankruptcy Can I File?

In the US, there are a few different types of bankruptcy filing categories, called “Chapters.” Chapters 7 and 13 are usually used by individuals for personal filing. Chapter 11 is used for businesses. These can all mean different things for a small business in Florida.

chapter 7 bankruptcy vs chapter 13 bankruptcyFiling for bankruptcy can be a powerful tool for debt consolidation and relief. It can help you get out from under the financial burden weighing you down. If you’re considering filing for bankruptcy, you may be wondering whether you should file Chapter 7 bankruptcy or file Chapter 13 bankruptcy. The right choice depends on your current income, assets, debts, and your future financial goals.

What are the Major Differences Between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy can be a relatively quick way to wipe out general, unsecured debt like medical bills and credit cards, and it requires no repayment. It is designed for people with little to no disposable income available to pay back debt. Although it wipes out most debts, it doesn’t clear particular types of debt such as taxes, student loans, or unpaid child support and alimony. When you file Chapter 7 bankruptcy, your nonexempt property is sold to pay back your creditors. The “means test” will help determine if you’re eligible to file Chapter 7 bankruptcy. If you make more than the median income of your state and have some disposable income to pay off debt you may be forced to file Chapter 13 instead.

divoice-court-desk-300x200Joint debt is considered to be any debt created by one or both spouses during the marriage. Upon divorce in Florida, the court decides which spouse is responsible for which joint debt. However, divorce court orders do not affect creditors, who will likely hold both partners liable for joint debt regardless of which spouse the court deemed liable. Common joint debts may include car loans, mortgages, credit card debt or other lines of credit. Below we answer some common questions about how joint debts are handled after divorce.

What Happens if the Court Ordered Spouse Decides Not to Pay Their Debt?

When a couple goes through a divorce in Florida, problems may arise if the spouse that was required by the court to pay the debt does not do so. Even if the final judgment in a divorce decree requires one spouse to be fully responsible for joint debt, that order holds no jurisdiction over the creditor. The creditor is likely to seek payment from the other spouse if the one ordered to pay fails to.

Emergency Room SignFar too many Americans find themselves in a financial crisis because of soaring medical costs. All it takes is one trip to the emergency room or a bad diagnosis for things to spiral out of control. But there are options. Will your medical debt be eliminated if you declare bankruptcy? Learn more about filing bankruptcy and what it means when it comes to medical debt.

Is Declaring Bankruptcy to Discharge Medical Debt an Option?

Sadly, nearly 1.7 million American households have experienced bankruptcy due to mounting medical expenses. This type of debt creates major stress and has become a fairly common reason to declare bankruptcy.

Man Looking at ComputerWhen you owe tax money to the federal government, there are certain collection methods that are unique to the IRS. The federal government is permitted to take more extreme measures to collect money than typical debt collectors. These measures can include placing liens and levies on your property. If you are facing an IRS lien or levy, contact a Jacksonville bankruptcy attorney to learn about your options. Liens and levies have different consequences for your financial future.

What is a Federal Tax Lien?

If you fail or neglect to pay a tax debt on time, the federal government can make a legal claim on the property you own. This claim is called a tax lien. Your property basically becomes collateral to insure the debt that you owe the IRS. A lien includes all of your property for the amount of the tax liability. This includes real estate, savings accounts and other personal assets. A lien is publicly recorded and will have a negative impact on your credit report.

A computer with bankruptcy and debt counseling website openBefore filing bankruptcy in Jacksonville, you’re required to complete credit counseling. The Federal Trade Commission states that you must complete this credit counseling from a government approved agency within 180 days of filing. You must also complete a debtor education course after filing in order for your debts to be discharged.

Why is Credit Counseling Required?

The main purpose of credit counseling is to help you evaluate your financial situation and ensure that bankruptcy is a last resort. Through counseling, you’ll determine if there’s a feasible way to handle your debts outside of bankruptcy without increasing what you owe.

a gavel on a bankruptcy court benchMany people worry about what happens after they make the decision to file for bankruptcy. While preparing your paperwork is half the battle, it’s important to be prepared for what occurs after you’ve signed your petition. Here’s what you can expect after filing bankruptcy.

The Automatic Stay is Put in Place.

An automatic stay is a federal court order that goes into effect the moment a bankruptcy case is filed. It prevents creditors from making any effort to collect on debts you owe. You’ll be assigned a case number by the court, which you should give to any creditors that try contacting you. If they persist, they will have to answer to the bankruptcy court.

a pile of credit cards including visa and mastercardThe primary reason people file for bankruptcy is to get rid of their debt and have a fresh start. But while many of your debts will be discharged in bankruptcy, some debts may remain after filing. Read on to learn more about how to reduce debt by filing for bankruptcy.

Which Debts are Not Discharged with Chapter 7

When you file Chapter 7 bankruptcy, many of your debt will be discharged. There are some debts, however, that will not be wiped out. Some of these debts may be subject to denial or successfully objected by the creditor. Others are never dischargeable, meaning that they fall under a predetermined list of non-dischargeable debts. These include:

one woman whispering a shocking secret to anotherMany people are concerned with the negative stigma that surrounds bankruptcy. They want to know who will find out if they decide to file. While a bankruptcy is publicly recorded, typically only creditors or bankruptcy attorneys will actually view this information. You probably shouldn’t worry too much about your friends, neighbors, or others in your social circles finding out.

What’s Included in My Bankruptcy Record?

The information on file will include copies of any documents related to the filing. Values of assets, creditors’ claims and information on any funds exchanged in the process will be listed. It will also include notes about meetings and phone calls.

a series of legal textbooks about trustsWhen filing bankruptcy, you’re probably concerned with safeguarding certain important assets. Will establishing a trust protect your assets from creditors? The answer will depend on several factors, including the type of trust you have. There are two types of trusts, revocable and irrevocable. Below we’ll discuss the purposes of each and how they apply when you’re filing for bankruptcy.

Revocable Trust

A revocable trust, or living trust, is the type of trust commonly used in estate planning. One of its primary purposes is to help your family avoid the stress and costs associated with probate after your death. Any assets included in this trust are not subject to probate court. This saves considerable time and hassle for the beneficiaries of your estate. The assets in the trust will be distributed according to your wishes.

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