Consumer Bankruptcy

Bankruptcy Law, Consumer Bankruptcy

How the Homestead Exemption Works in Bankruptcy

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When filing for bankruptcy many clients worry about losing everything they own, including the roof over their heads. However, the U.S. Bankruptcy Code provides bankruptcy exemptions, which allow the filer to protect certain property from being sold off during the course of bankruptcy. The State of Florida offers some of the most generous exemptions in the country for bankruptcy filers, including the homestead exemption.

The homestead exemption allows the filer to protect the equity he or she has in the home in which the filer resides. Florida bankruptcy law allows the filer to claim an exemption on his or her homestead for the full amount of the home, allowing him or her to keep the property during the bankruptcy. The key is, however, the homeowner must have bought and owned the property for at least 1,215 days prior to the bankruptcy filing.

Bankruptcy Law, Consumer Bankruptcy, Divorce

How Will a Bankruptcy Case Affect my Pending Divorce?

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People will hold off on filing for bankruptcy for several reasons, especially if they are in the midst of a pending divorce case. The fear is that a bankruptcy case will affect the ability of the parties in a divorce case to divide their property. While a bankruptcy case will not affect a family law court’s ability to handle child custody and child support matters, the bankruptcy will prevent the court from finalizing a division of marital property.

Consumer Bankruptcy

Debunking the Biggest Bankruptcy Myths

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One of the biggest reasons consumers hold off on filing for bankruptcy has to do with the myths surrounding the process. Misconceptions are often the reason behind these myths. Debunking these bankruptcy myths can shed light on the legal process that can help (and has helped) so many people, including an estimated 885,000 American consumers last year.

Myth 1: Bankruptcy Irreversibly Damages a Consumer’s Credit Score

While, yes, a bankruptcy case will almost certainly hurt a consumer’s credit score, this damage is far from permanent. In fact, many consumers have successfully rebuilt their credit scores after successfully completing a bankruptcy case.

Consumer Bankruptcy

What to Expect Before, During and After Filing for Bankruptcy

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The process of filing for bankruptcy can seem daunting and unclear for many filers. The uncertainty behind the process often drives the fear of the unknown, which keeps many people from pursuing a bankruptcy case. Pulling back the curtain and knowing what to expect when filing for bankruptcy can help clear up any myths or misconceptions surrounding bankruptcy.

Making the decision to pursue a bankruptcy case is often the thing that holds people back the most. It can be difficult for someone to admit that they need financial help offered through a bankruptcy case. Many see it as admitting failure, which could not be any further from the truth.

Consumer Bankruptcy

Questions to Ask Yourself Before Filing for Bankruptcy

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The decision to file for bankruptcy is never an easy one. It takes careful consideration and depends on a number of factors. Before making the decision to file for bankruptcy, ask yourself these questions.

Have All Other Options Been Exhausted?

Bankruptcy is not the only option when it comes to debt relief.  It often helps to first meet with a bankruptcy attorney to discuss your options. A budget is one tool a consumer can use to see what unnecessary expenses can be eliminated, freeing up additional funds to pay off debts. The consumer may also have luck in selling some of his or her assets to pay off various debts. Another option is for the consumer to reach out to his or her lenders to see if some type of payment plan or debt settlement can be reached on the debt.

The consumer may also consider credit counseling. This step should be taken even if the consumer is considering filing for bankruptcy since credit counseling, including a two-hour financial management course from a government-approved agency, must be completed at least 180 days before a bankruptcy discharge is issued.

Consumer Bankruptcy, Tax Debt

Does Bankruptcy Eliminate Tax Debt?

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By the time an individual reaches the point of filing for bankruptcy, he or she is likely inundated with all types of consumer debt, ranging from medical debt to credit card debt and possibly, tax debt. While a consumer bankruptcy case will eliminate a large portion of this debt, tax debt is not normally included in this list.

Taxes fall into the category of “non-dischargeable priority debt,” which means that the bankruptcy case will not eliminate them. Additionally, repayment of these claims is given priority over other creditors’ claims. However, circumstances do exist where tax debt can be discharged with a bankruptcy filing, but certain requirements must exist before that can happen.