Bankruptcy

If you have tried every way imaginable to avoid bankruptcy but find that you have no other way out of the situation, the first step you should take before filing is to consult with a bankruptcy attorney. A bankruptcy attorney can be hired or appointed by the court systems to help you through the court proceedings. If you decide to select your own attorney, make sure to select someone with previous experience in bankruptcy law, preferably someone who works specifically with bankruptcy.

Even if you don’t hire  bankruptcy attorney Giovanni Nicosia, you should always be prepared to ask the attorney questions regarding your own case. Here is a list of questions you should always ask your attorney to make yourself more aware of your bankruptcy proceedings:

* What type of bankruptcy is right for me?

Keep in mind that the Federal court system in the United States has eight different types of bankruptcy filing available. Of course the two most popular are Chapter 13 and Chapter 7, but there are a variety of different details and rules that apply to each type of filing. A good bankruptcy attorney will be able to sift through your financial difficulties and recommend the best type of bankruptcy for you.

* How do I file for bankruptcy?

Filing for bankruptcy will need to be done in the state where you currently live. If you plan to remain represented by a bankruptcy attorney, their legal staff can help to prepare all of the paperwork that is necessary to present to the court system. If you simply want to use the bankruptcy attorney for a consultation, make sure you don’t leave the attorney’s office without the necessary paperwork to begin the bankruptcy process.

* What type of fees will I owe?

This is important to ask in regards to your bankruptcy attorney as well as the court system. Most bankruptcy attorneys will give a free consultation but any remaining time on the proceeding or in court will cost a fee. Some attorneys charge by the hour while others charge a flat fee for bankruptcy services. As well, the court systems usually charge a court fee connected with filing the case, administrative charges and extra Chapter 7 fees to pay a trustee in charge of the bankrupt account.

* Where do I go to file my bankruptcy claim?

Bankruptcy cases are handled by the federal court systems in every state. This usually means that the bankrupt party will need to give the bankruptcy paperwork to the state courthouse, usually in a state’s capitol city. Your bankruptcy attorney should know the address and rules regarding whether or not paperwork can be sent by mail or if paperwork needs to be given in person.

* What happens after filing for bankruptcy?

Immediately after filing for bankruptcy, the court system will send out notification to creditors of the pending bankruptcy case. From this point on, creditors are considered to have a “restraining order” by the debtor and are not allowed to contact the debtor requesting payment. Depending on the type of bankruptcy, a hearing will be scheduled and deadlines will be set for creditors to file a claim and attend the hearing. Of course, all of the proceedings from here are dependent on the type of bankruptcy filed, so it is important to be in contact with your bankruptcy attorney who can more readily answer these questions.

Florida Chapter 13 Bankruptcy Information

Under a chapter 13 bankruptcy, a debtor proposes a 3-5 year repayment plan to the creditors offering to pay off all or part of the debts from the debtor’s future income. You can use Chapter 13 to protect yourself and prevent a house foreclosure; make up missed car or mortgage payments; pay back taxes; stop interest from accruing on your tax debt (local, Florida state, or federal); keep valuable non-exempt property and more. If you can stick to the terms of your repayment agreement, all your remaining dischargeable debt will be released at the end of the plan (typically three to five years). The amount to be repaid is determined by several factors including the debtor’s disposable income. In addition, the total amount paid to creditors under the Chapter 13 plan must also be at least as much as creditors would have received if the debtor filed a Florida Chapter 7 bankruptcy. To file Chapter 13 bankruptcy you must have a “regular source of income” and have some disposable income to apply towards your Chapter 13 payment plan.

Chapter 13 bankruptcy is generally used by debtors who want to keep secured assets, such as a home or car, when they have more equity in the secured assets than they can protect with their Florida bankruptcy exemptions. Chapter 13 bankruptcy is a reorganization whereas Chapter 7 bankruptcy is a liquidation.

A chapter 13 bankruptcy allows them to make up their overdue payments over time and to reinstate the original agreement. Also, where a debtor has valuable nonexempt property and wants to keep it, a chapter 13 may be a better option. However, for the vast majority of individuals who simply want to eliminate their heavy debt burden without paying any of it back, Chapter 7 provides the most attractive choice.

Florida Chapter 7 Bankruptcy Information

In a Chapter 7 bankruptcy you wipe out your debts and get a “Fresh Start”. Chapter 7 bankruptcy is a liquidation where the trustee collects all of your assets and sells any assets which are not exempt. The trustee sells the assets and pays you, the debtor, any amount exempted. The net proceeds of the liquidation are then distributed to your creditors with a commission taken by the trustee overseeing the distribution.

Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged.  Usually, large credit card debt and other unsecured bills coupled with few assets typify a Chapter 7 bankruptcy filer. In the vast majority of cases this type of bankruptcy is able to completely eliminate all of the filers debts.

You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts. To do so, you must sign a voluntary “Reaffirmation Agreement”. However, you cannot wipe out that debt (or discharge the debt) for another six years. In other words, if you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for six years. You will still owe that debt and you must continue to pay it just as you were to continue to pay it before you filed the bankruptcy. In order to reaffirm the debt, you must also bring it current. In other words, if you are three or four months behind, then you must pay the back payments which are due in order to reaffirm it. You can selectively reaffirm your debts – you can state that you wish to keep the house and the furniture, but that you want the car and the jewelry to go back to the respective Creditors.

Reaffirmation agreements can be set aside during the earlier of 60 days after the agreement is filed with the Court, or upon the Court’s issuance of an Order of Discharge.

Florida Chapter 7 Bankruptcy or Florida Chapter 13 Bankruptcy?

There are several situations where a Chapter 13 is preferable to a Chapter 7. A Chapter 13 bankruptcy is the only choice if you are behind on your mortgage or business payments and you want to keep your property, either in Florida or another state, at the end of the bankruptcy process. A chapter 13 bankruptcy allows you to make up their overdue payments over time and to reinstate the original mortgage agreement. In general, if you have valuable property not covered by your Florida bankruptcy exemptions that you want to keep, a chapter 13 filing may be a better option. Also, people file Chapter 13 bankruptcy because they have too much income to file a Chapter 7 bankruptcy or have the kind of debt that is non- dischargeable in a Chapter 7 (e.g. certain taxes).

However, for the vast majority of Florida residents who simply want to eliminate their heavy debt burden without paying any of it back, Chapter 7 provides the most attractive choice.

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