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What Chapter 7 Bankruptcy Has to Offer And What It Does Not

A person files for bankruptcy when their debt becomes unmanageable. When your scheduled debt payment becomes more than your monthly income, you can file for bankruptcy. In 2021, 399,269 cases of personal bankruptcy surfaced in the USA.

With today’s expenditures and interest rates, your debts may be out of your hands. If you cannot manage your debts, you can file for chapter 7 bankruptcy. It is necessary to let professional bankruptcy lawyers handle your case. Asset management can be a complicated process. If you fail at managing, you will be troubled by all the accumulated debt. Here are a few pros and cons of chapter 7 bankruptcy.

Keep A Specific Amount of Money

Many people fear filing for bankruptcy because they fear losing their possessions and savings. It is a rational fear of losing all financial control over your assets. When the bank appoints an impartial case trustee, it gives them the power to sell your assets.

Indebted people often mistake this for a complete loss of assets and money. Filing for bankruptcy does not mean that you won’t be able to keep a portion of your savings. In most states, an indebted person can keep 20,000 dollars in their bank.

After you file for bankruptcy, your bank credit will go a hundred points down. You may keep a credit score of 500 or 550 points after filing for bankruptcy. You can face a lower credit score if you have a low score before bankruptcy.

Liquidate Assets to Forgive Debt

Your case trustee will liquidate all your assets and ensure a fair market value of the assets. The liquidated assets will go to all your creditors to satisfy your debts. If you have taken debt from multiple sources, the bank will hold them for you.

To file for bankruptcy chapter 7, you need to make an appearance in court to elaborate and provide the record of your assets. You have to answer questions regarding the sale of your assets and how you acquired them. These questions are essential, according to the law, for you to get a chance to file for bankruptcy. You must comply with all the demands and jurisdictions that the courts request. Ultimately, the creditors will forgive your debt. You may lose substantial assets in court to the bank, and the creditors will forgive your debt.

Personal Property Exemptions

When the bank asks for the liquidation of your assets, it does not include your home. You do not have to worry about your personal property that sustains your life. If you have other property, you can liquidate or file bankruptcy, chapter 7. Take the help of a bankruptcy attorney to guide you through the burdensome financial crisis. Do not punish yourself by going through the system alone without any help. Make sure you hire a professional to deal with all the upcoming problems. A practiced lawyer who knows their way around the crises will help you navigate a safer and more suitable path to bankruptcy.

Buy Time for Mortgage

Many people buy their homes with mortgages. In the recent age of added and lifestyle expenses, it is almost impossible for people to build a house of their own. It is everyone’s dream to build a house for their children and with their partners. Most people take out a mortgage to get home. People think they can afford a large home because of low instalments. But in reality, the maintenance of a house also takes up a lot of money. You should buy a home that you can keep and maintain.

If you are stuck on your home mortgage, you can file for bankruptcy. Filing for bankruptcy may not remove the mortgage on your home, but it will buy you some time. You can use that time to resolve your financial issues and get back on your feet.

The bank will let you take more time from your creditors if you file for bankruptcy chapter 7. You can file for chapter 7 bankruptcy online or offline, as you see fit.

Chapter 7 Bankruptcy VS 13

Chapter 13 bankruptcy makes the indebted person pay their loan according to a plan. The lawyer or financial advisor makes a plan for the bankrupt person to help them get out of debt by paying it in instalments. For chapter 7 bankruptcy, the bank liquidates your assets to compensate for your debt, and the creditor may forgive the rest of the debt.

Both bankruptcies have different criteria for qualification, and all people have an equal chance of filing one. You must acquire the help of an attorney to get an explicatory idea of these filings and if you qualify for them.

Discharge From Personal Liability

After a person file for bankruptcy, the court discharges the person from all personal liability. The court issues a discharge order before the end of the trial for people to help manage their resources. Your creditors will not come from you after the court orders to discharge you from all the creditor’s debt.

It helps keep the pressure down in an unmanageable situation for many people. The court orders provide you with more time and the help of an impartial case trustee. You can let the bank and the court take care of your assets. Going bankrupt is not a pleasant experience, but it makes your life bearable after the immense burden of debt.

Rejection of Bankruptcy

If you fail to comply with the court dates and requirements, your application will be rejected. You have to make sure you reach court on time and provide all the relevant records. If you have filed for bankruptcy before and the court denies it for a reason, or you hold your lieu, you will not be eligible to file for bankruptcy again. If you file for bankruptcy once, you are not eligible for it for the next eight years.

Conclusion

Therefore, you must keep your financial affairs in order and hire a lawyer for legal representation and guidance in the event of bankruptcy. Apply for chapter 7 or chapter 13 bankruptcy, whichever suits your situation.

Florida Bankruptcy: 3 Signs You Need To Consult A Lawyer

In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Some have experienced serious problems, such as loss of a spouse, illness, or unemployment, that hinder them from getting a job or having enough money to provide for themselves. As a result, they fail to pay living expenses and rack up debts.

If you’re dealing with a financial crisis, you can seek help from a bankruptcy lawyer. A bankruptcy lawyer will not only offer legal advice, but they will also assist you with paperwork. They evaluate your situation and develop an understanding of your debts and assets, so they will provide you with the best plan for Florida bankruptcy.

Plus, they’re excellent negotiators. They have the expertise to negotiate favourable deals on mortgages, car loans, credit cards, or other debts. They will aid you in exploring your options and negotiating a payment plan with creditors.

Moreover, they help you file for debt relief under the Bankruptcy Code. They offer you support in filing for a Chapter 7 or Chapter 13 bankruptcy case if you have a debt you can’t afford to pay.

Hiring a lawyer is crucial, as failure to pay your debt multiple times can lead to legal action and a court judgment if you haven’t gone through the court process or provided any proof of financial hardship or payment arrangement. As a consequence of your inaction, a creditor or lender can take part of your salary every payday until the debt is paid, based on the Florida wage garnishment laws.

Read on to learn more about the signs you’ll need to enlist the services of a lawyer.

1. You Use Your Credit Card To Pay Other Credit Card Debt

Sometimes, it’s fine to use your debt to pay another debt. For instance, you might obtain a balance transfer on a credit card for zero percent interest. You can then move that high-interest debt to that credit card and save a considerable amount of money in interest while paying one of your debts in full at the same time. However, some cases prove there’s a financial issue concerning the action of paying off credit cards with another credit card or debt.

If you’re using balance transfers to have more money to spend, it may be high time to consult a bankruptcy lawyer since you’re already spending beyond your means. This then becomes a vicious circle. You’ll obtain one debt to spend on another but will end up with having a new debt that has to be paid. You’re most likely to have a hard time repaying the debt because you won’t be able to pay off the original debt. In this kind of situation, a lawyer might advise you to file for bankruptcy in Florida.

2. You Have A High Credit Balance

Another noticeable sign you need to be aware of is having a high credit balance. It’s usual for others to rush on to get the credit cards with the highest purchasing balance, but they fail to realise that they’re actually dismissing their financial capacity.

Some believe they can purchase anything if they have the chance to afford instalments. However, this isn’t always the case. If you use your credit card with a significantly high balance for a while and think you’ll never have the chance to repay it under normal conditions, this can result in a low credit score. Hence, you should avoid further issues by consulting a lawyer to arrange things properly.

3. You Miss Your Mortgage Payments

If you’re dealing with increasing costs for bills and rising debt, you’ll have a hard time paying your mortgage. When you have missed mortgage payments, the bank will begin a foreclosure.

Furthermore, if you own the property but have a significant amount of debt with the bank, your home could become a tool for collateral damages. The bank can take away your home to make up for the debt that you’ve failed to pay.

If you’ve been reminded of your loan through phone calls or letters from the bank, you’ll need to consult a bankruptcy lawyer. Your bankruptcy lawyer can form a plan to keep your property and pay the bank through another alternative. They might also guide you through filing for Florida bankruptcy. In addition, they can work with you to figure out a way to lower your bills.

Conclusion

Dealing with a financial crisis is difficult and stressful. It might make you feel hopeless and helpless. But you can turn to a bankruptcy lawyer who will lead the way, find effective solutions, and ensure that you file for Florida bankruptcy correctly. So, if you notice any of these signs, you should consult a bankruptcy lawyer as soon as possible. With their assistance, you’ll be able to live a life of financial freedom.