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Boca Raton Debt Relief Blog

Consult with a consumer bankruptcy attorney for Chapter choice

When considering bankruptcy in Florida, it is important to seek the services of an experienced consumer bankruptcy attorney. That person will be interested in getting a discharge of the consumer's unsecured debts quickly and permanently when possible in a bankruptcy filing. Although the legal fee for a Chapter 7 must be paid prior to filing, it is often the best solution for consumers swimming in overwhelming unsecured debt.

Recent studies show that there is a practice that is gaining prevalence where the system seems to encourage filing a Chapter 13, which is a payment plan. This type of bankruptcy is not mandatory, however, and it only works when there is a home to be saved through monthly payments. It may work where there is an unusually high tax bill or other kind of secured or priority debt.

Bankruptcy may be the best remedy to erase crippling debt

Florida and all other states offer access to the federal bankruptcy remedy as a way to eliminate debt in a rapid and permanent fashion. It is not always the best way to go, which is a subject best discussed with an experienced consumer bankruptcy attorney. There are some signposts, however, that can guide consumers to know whether they will benefit most from filing a bankruptcy to resolve their debt problems.

One way to identify the need for bankruptcy relief is to take a look at one's total debt load. For example, if the consumer's credit card debt equals or exceeds one-half of monthly income, an appointment to discuss bankruptcy is a wise decision. It will be a harrowing battle to try and overcome one's debt balance that is so restrictively high. In fact, without an immediate and drastic increase in income, it just can't be done.

Bankruptcy filing is warranted in cases of overwhelming debt

Despite the potential drawbacks of filing a consumer bankruptcy, there are many instances where it is the best option that a struggling individual or married couple residing in Florida may choose. That is especially true where the burden of the debt is overwhelming and would take longer than just a few years to pay in full or even partially. Education and experience qualify consumer bankruptcy attorneys to forthrightly advise potential clients whether they are qualified to file and whether they have better options.

A free consultation with a consumer bankruptcy attorney allows consumers to learn all the positive and negative impacts of a bankruptcy, and importantly, they can get their questions and concerns fully explained and clarified. Some of the positive reasons to file include the important goal of getting the family back on track, dispensing with years of worry and outside pressure and the emotional relief of starting over with a clean slate. The last point is critical because no other option or program gives a consumer the legal right to eliminate 100 percent of all unsecured debt quickly and forever.

Bankruptcy gives quick and permanent relief from unsecured debt

In Florida and nationwide, debt settlement companies have been the subject of intensive scrutiny by state and federal authorities in the past several years. The peak of the problem may be over now that many abusive companies have fallen under the demands of increased regulatory supervision. The question arises, however, whether the remaining group of debt settlement companies can measure up in results to the substantial benefits that the federal bankruptcy remedy gives to qualified consumers.

The debt settlement company acts mainly as a negotiator on behalf of the consumer debtors who have found it impossible to keep up with their financial obligations. The client puts up a down payment, sometimes a quite hefty one, to get the company to start dealing with the creditors on the client's behalf. Where a debt may be feasibly settled with one lump sum payment, the company may succeed in getting a decent discount for the client.

Bankruptcy even gave some celebrities a path for a fresh start

Filing a bankruptcy in Florida or elsewhere is not the end of the line or the ultimate personal tragedy. Some of the most famous and influential people, including some of the greatest entertainers and actors, have filed bankruptcy and roared back to a life of economic success. The justifying theory behind the federal bankruptcy laws are to give people a second chance for financial security after they have fallen deep into economic difficulties. The slate is wiped clean in many instances and the individual or married couple can get a fresh start.

Some celebrities who have filed bankruptcy and come roaring back are Larry King, Kim Basinger, Meat Loaf, Isaac Hayes, Cyndi Lauper, Marvin Gaye and 50 Cent. Even the venerable author and satirist, Mark Twain, had to file to consolidate his position. The country's current president, Donald Trump, filed several business bankruptcies for his corporations.

Retirement funds are protected from the bankruptcy estate

Many consumers in Florida and elsewhere find it difficult to consider filing for bankruptcy relief. Most who face the issue are hard-working persons who are used to paying for their debts in a timely manner. The hard facts, however, do sometimes dictate that the strongest remedy be employed for the sake of economic survival of oneself and one's family. When compared with other remedies, there is no doubt that the bankruptcy alternative is the most effective way for those who have overwhelming debt to obtain a fresh start.

Consumers considering bankruptcy are often concerned about their retirement funds. Fortunately, in most cases the Bankruptcy Code prohibits those funds from being included in the bankruptcy estate. The Supreme Court has made it clear that 401(k) retirement plans qualified under the Employee Retirement Income Security Act, commonly referred to as ERISA, are protected assets that are exempt from seizure by the bankruptcy trustee.

Bankruptcy is the best solution in many consumer debt scenarios

In Florida and nationwide, our economy and other factors continue to draw many consumers to the point of facing uncontrollable debt. While services such as debt consolidation companies and second mortgage lenders may appear to be life-saving alternatives to get out of debt, they represent the depletion of a consumer's income and/or the spending down of one's assets. It is often discovered, after a period of painful failures in trying other remedies, that a personal consumer bankruptcy represents the best choice for getting a fresh start with a clean slate.

Debt consolidation programs can drain the consumer's income and make economic survival a desperate battle. Worse yet, such companies are not always reliable. Some of them may close up without notice and disappear, along with thousands paid over to the company by the innocent customer. In some cases, the company will close or disappear, taking with it thousands in customer payments that were supposed to go for debt reduction. 

Bankruptcy may be the most effective remedy for runaway debt

Many Florida residents turn away from confronting their debt problems, thinking that things will get better and normalized at some time in the future. That technique of procrastination never works out, but it does usually allow the debt problems to fester and get even deeper until the next month rolls around. That avoidance response may bring an individual or married couple to the inevitable conclusion some months into the future that bankruptcy is the strongest remedy for economic survival and to get a fresh start.

Wishing for a fresh start in the beginning stages of overwhelming debt just won't cut it. Facing up to and confronting the reality of the problem is really the only effective way to deal with rising debt. For some who may be in avoidance of realizing their debt problems, there are a number of signposts along the way that should be helpful in identifying that action is required. With credit card balances that keep rising instead of going down, the cardholder may be experiencing uncontrolled debt.

Bankruptcy filing results in automatic stay of all collections

In Florida and all other states, when a consumer files a bankruptcy, a legal order called the automatic stay goes into effect. This court order prohibits creditors from taking further collection actions against the debtor unless by permission of the bankruptcy court. This is an effective remedy that saves homes from the entry of foreclosure judgments and even from pending sheriff's sales.

If a creditor's lawsuit against a borrower is pending when the bankruptcy is filed, all actions will be stayed by the bankruptcy order. This applies to lawsuits on credit card debt or on medical debt. A repossession on a vehicle can be stopped by the automatic stay, and under bankruptcy laws, the vehicle that has already been repossessed may, in some cases, have to be returned to the debtor pending further proceedings in the bankruptcy.

For some, income continues flat and bankruptcy looms ahead

Lower-income Americans in Florida and nationwide are entering a financial downturn due to their inability to keep up with mounting consumer debt. Undramatic earnings growth has stymied their ability to meet steadily growing prices and debt. They are financing more of their spending by taking out new credit and loans. Creditors are squirming also as they view the specter of consumers taking on increasingly unaffordable debt loads. The question on the minds of many nervous creditors is to what extent the bankruptcy boom of earlier years will step in to mediate the expected problems.

The percentage of household debt that is overdue has risen for two consecutive quarters. The current administration is raising the rates to borrow, making the crunch come full circle. In effect, those with lower incomes who have been willing to incur consumer debt for survival, which is of course pretty much a losing proposition.

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