A consumer bankruptcy has seen a rise in costs and legal fees since 2005, when Congress passed a revised Bankruptcy Code that made the process more difficult and added considerable paper work for successful completion of a case. That is perhaps why bankruptcy attorneys nationwide, including in Florida, see a decided increase in filings in the first few months of each calendar year. Individuals or married couples may use the funds from their tax refunds to pay for the filing fees and legal fees.
The cost of a consumer Chapter 7 proceeding continues to rise as courts and legislators see to it that the amount of detailed legal work is increased over a steady incline. People who don't have a tax refund to count on may find other ways to fund the filing, including through family loans, or through savings and payment plans worked out with their consumer bankruptcy attorney. Generally, the attorney cannot file the papers with a balance still due from the client, but the attorney can sometimes work with the client(s) to legally hold off creditors while the payments are being made.
Consumer bankruptcy attorneys generally offer a free consultation. This benefits those who are not decided on whether the action would be a good thing for them. In that all-important first meeting, they will learn if they are qualified to file for a Chapter 7 or whether they would have to file a Chapter 13 instead. They will learn about the bankruptcy exemptions and their ability to keep their house, cars and other property. They will discuss and receive information on the specific impact that the case will have on their future financial life.
A Chapter 7 is beneficial to an individual or married couple residing in Florida who are struggling with overwhelming credit card and/or high medical bills. The bankruptcy will quickly wipe out all such unsecured debt without payments to the creditors. In addition, consumers will be able to keep their qualified retirement accounts, and most or all their property through application of the exemption laws.
Source: USA Today, "When a tax refund means bankruptcy", Sean Pyle, April 3, 2017