It’s never easy to be in a position where you are considering filing for bankruptcy. Filing for bankruptcy is not uncommon. Depending on your circumstances, it can feel like it is your only option or your best option, and it shouldn’t be something to fear. For a lot of individuals, it can mean a fresh start. This article will discuss a few of the pros and cons of filing for Chapter 7.
What Are Some Advantages to Declaring Chapter 7?
There are many misconceptions when it comes to Chapter 7. Some people view it as their last option, and they fear that they will lose all of their assets. On the contrary, statistics show that more often than not, participants keep most of their assets in their names and can take advantage of a fresh start.
Most unsecured debt can be forgiven when filing for Chapter 7. This includes credit cards, medical bills, personal loans, and more. This is one of the most appealing characteristics of filing chapter 7 over other bankruptcy options.
There is no maximum limit on the debt you can include in a bankruptcy. This makes it a viable option not only for individuals but for small businesses and corporations as well.
You get an automatic stay on collections once the process is complete. This can stop actions such as garnishing wages, lawsuits, creditor phone calls, and harassment.
In Florida, the homestead exemption also protects a primary residence from being liquidated to pay off creditors if the debtor has lived in FL for forty straight months or more. This can make a huge difference for those afraid to lose their assets by filing for Chapter 7.
What are Some Disadvantages of Filing Chapter 7 in Florida?
If you have lived in Florida for at least two years, specific laws that aren’t necessarily common in other states will apply. It will not allow you to utilize the same exemptions as Florida residents unless you have resided in Florida for the last two years. This helps dissuade those considering filing for Chapter 7 from moving to a state with better exemptions than their current state.
Florida residents will be required to partake in a means test to establish whether they qualify to file for bankruptcy. This involves a complex calculation that includes your expenses and income as well as the amount of your debt to determine whether you can pay back the debts owed. Some states don’t have this stipulation, making qualifying easier for residents of other states.
Why Would I Need a Bankruptcy Attorney?
It can seem counterintuitive to spend more money to relieve yourself from debt. What makes sense, however, is handling your bankruptcy filing as effectively as possible to avoid a lengthy process and common errors that could cost you significantly more money in the long run.
Contact my law firm today at 407-499-5680 to discuss your specific questions and learn more about how I can help you with Chapter 7 bankruptcy.