Bankruptcy is a powerful tool for debt relief. It can provide a fresh start for people who have been living with the burden and stress of debt for years, and allow them to finally move forward. Unfortunately, there are many myths and misconceptions about bankruptcy that can scare people off before they learn about its benefits. When you work with an experienced bankruptcy attorney in Jacksonville, they can help you pick the right option that will have the best impact on your financial future.
There 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.
When 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.
When 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.
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.
It can be devastating to lose your home in a foreclosure. Fortunately, filing Chapter 13 bankruptcy is an excellent option that can save your home. Chapter 13 can give you the opportunity to reorganize your debt to make it more manageable. This debt includes payments you are making on your mortgage.
What is Chapter 13 Bankruptcy?
Chapter 13 is also known as a wage earner’s plan. You will be able to determine a plan to repay all or part of your debts. With the help of an experienced Jacksonville bankruptcy lawyer, you propose a plan to repay your creditors. The amount you are required to repay is based on several factors, including your income. The time-period for this repayment plan is typically three to five years.
If you and your spouse are contemplating filing for bankruptcy, you may wonder if you are required to file jointly. Married couples can, in fact, file separately. When filing for bankruptcy in Jacksonville, married couples have the following options when choosing to file for Chapter 7 or Chapter 13:
- One spouse files individually
- Both spouses file individually