Many people feel guilty about filing for bankruptcy, but the reason they file is often beyond their control. The majority of people who file for bankruptcy do so because they lost their jobs, became sick or had a medical emergency, or got a divorce. Financial mismanagement is becoming a less common factor in bankruptcy filings, while job loss is one of the biggest factors.
Even if someone is able to get a new job after being laid off, oftentimes they are already too far behind on their mortgage, car and credit card payments, and their debt spirals. Exorbitant medical bills are another factor that are out of a family’s control. Even with health insurance, there are still out-of-pocket expenses and co-pays that can add up quickly.
Divorce causes two incomes to be taken down to one, with separate homes, additional bills and possible child support payments. Predatory lending and the misuse of credit during these desperate times can play a role in consumer bankruptcy filings.
Chapter 7 bankruptcy allows you to discharge your debt and get a fresh start. Common categories of dischargeable debt include:
- Credit card debt (including overdue and late fees)
- Collection agency accounts
- Medical bills
- Personal loans from friends, family, and employers
- Utility bills (past due amounts only)
- Dishonored checks (unless based on fraud)
- Student loans (only if undue hardship can be proven)
- Repossession deficiency balances
- Auto accident claims (except those involving drunk driving)
- Business debts
- Money owed under lease agreements (includes past due rent)
- Civil court judgments (unless based on fraud)
- Tax penalties and unpaid taxes past a certain number of years
- Attorney fees (except child support and alimony awards)
- Revolving charge accounts (except extended payment charges)
- Social security over-payments, and
- Veterans’ assistance loans and over-payments.
In most cases, Chapter 7 bankruptcy filers automatically receive a discharge at the end of their case. A discharge releases you from personal liability for the debt and prevents the creditor from taking any collection actions against you. In other words, you are no longer legally required to pay any debts that are discharged. In Chapter 7, the court usually grants the discharge 60 days after the 341(a) Meeting of Creditors. Typically, this means you will obtain a discharge about four months after filing your Chapter 7 bankruptcy petition.
If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.