Florida Bankruptcy Basics
Why is Bankruptcy a bad word? In corporate America, bankruptcy can be very powerful, useful, and shrewd tool used by companies to shrink debts and increase profit margins. It often gives companies the power and leverage needed to renegotiate or liquidate debts so they can energize the bottom line. Can bankruptcy do the same for Florida’s consumers? Absolutely. So why are consumers led to believe that bankruptcy is a bad word? The cynic (and realist) in me has concluded that this is the product of corporate America’s campaign against the consumer. They spend millions of dollars convincing us that paying them their interest is the only ‘honorable’ option available to John Q. Citizen. All the while, these same banks and lending institutions are walking away from their bad debts, not honoring contracts with consumers that do not benefit them enough, taking government bailouts (tax payer money) to pay their debts, and sifting all of the risk of business onto the consumer while hording the profits all for themselves. Multi-million dollar bonuses are being paid out to the CEO of the company that is charging you 35% interest on your credit card even though you have not missed a single payment. Meanwhile, your nice, school teacher neighbor is getting their salary and benefits cut or even losing their jobs. What does this have to do with bankruptcy? Everything. Your bankruptcy attorney should be an advocate for consumers. At STAMATAKIS + THALJI we are passionate about representing consumers in bankruptcy. We live, breath, and believe in what we are selling. Consumers should use bankrupcty and every legal means available against creditors to ensure the financial strength of their own families.
Bankruptcy is not as complicated as it seems. While there are many rules and regulations that can be confusing without proper guidance and representation, many of the basic concepts make sense. Read below to get an idea of some of the basic questions we will ask you during your FREE CONSULTATION.
Chapter 7 Debt Liquidation: In a Nutshell
During your FREE CONSULTATION we will ask you the following:
1. How much credit card debt do you have? The more credit card debt you are carrying the more likely that Chapter 7 is the bankruptcy for you. A Chapter 7 Bankruptcy Liquidation will eliminate all of your debt without requiring any payments by you to the creditor in most circumstances. As you already know, paying off credit cards can be difficult. If you are simply paying the minimum then it will take you decades to payoff those debts, that is only if you do not spend anymore money on those ceadit cards. Bankruptcy is a major option for those in similar circumstance.
2. Do you want to save a home or car or other asset? Chapter 7 Bankruptcy Liquidation is usually not ideal when the goal is to save your home or car other asset. A Chapter 7 bankruptcy will not offer you a repayment plan on your mortgage. During the bankruptcy liquidation process, you turn over any nonexempt assets and the court washes away all your debts. From a practical perspective, this is usually not relevant for most consumers. Most do not take any assets into a Chapter 7 bankruptcy.
3. How much money do you make? Qualification for a Chapter 7 Bankruptcy Liquidation is based on income. As a general rule, single filers making less then $40,000 per year are presumed to qualify while a couple making less then $50,00 will also qualify for a Chapter 7 bankruptcy. If you make more that does NOT mean that you do not qualify, but we will have to plug your income and expenses into a complex formula known as the bankruptcy means test. This bankruptcy means test was a large part of the change in the bankruptcy laws in 2006. Often times, people making substantially more then $40,000 or $50,000 will qualify for a Chapter 7 Bankruptcy Liquidation.
4. Do you have savings, stocks, or free and clear land? If you do then you will have to turn over any non-exempt savings to the Bankruptcy court. This means anything more then $1,000 – $2,000 will either go to the Bankruptcy court or you will be forced to compensate the bankruptcy court.
5. Do you have a 401K or IRA? If you do then don’t touch it, these are usually exempt in abankruptcy and you will be able to keep them after filing a Chapter 7 Bankruptcy Liquidation.
6. Do you have equity in your homestead? If you do this is good news, because your equity is 100% exempt in a Chapter 7 Bankruptcy and you can keep it.
Click here for more details on Chapter 7 Bankruptcy Liquidation.
CHAPTER 13 Re-Organization: In a Nutshell
During your FREE CONSULTATION we will ask you the following:
1. Do you want to save your home, investments, or other assets? If the answer is yes then a Chapter 13 Bankruptcy may be right for you. In fact, a Chapter 13 is specifically designed for this purpose.
2. Do you have 2 mortgages? If you do you may be able to eliminate the 2nd or 3rd mortgage in a Chapter 13 Bankruptcy.
3. Are you behind on your mortgage payments? If you are a Chapter 13 Bankruptcy will give you a repayment plan to get caught up on your payments, usually over the course of 3-5 years.
4. How much money do you make? A Chapter 13 Bankruptcy does not have the same income restrictions that a Chapter 7 Bankruptcy has but the more money you are making the more likely it is that you will be successful in a Chapter 13 Bankruptcy.
Click here for a more detailed discussion on Chapter 13 Bankruptcy Re-organization.
If you are considering hiring a bankruptcy attorney make sure they have experience in bankruptcy court and make sure they do not also represent creditors and banks. Unfortunately, we often find that many bankruptcy attorneys that represent consumers in bankruptcy on Monday represent the banks on Tuesday. At STAMATAKIS + THALJI we relish our job as Florida’s bankruptcy attorneys.