How Long Does Bankruptcy Last on Your Credit Report

After your bankruptcy is complete and you receive your discharge, the bankruptcy filing will appear on your credit report. If you completed your Chapter 13 repayment plan, it may remain on your credit report for 7 years. Chapter 7 bankruptcy may remain on your credit report for 10 years. It is important to remember that although Chapter 7 and 13 allow you to start living your life with a clean slate financially (except for those non-dischargeable debts), they do not wipe your credit report clean. You should consult with a bankruptcy lawyer for assistance on rebuilding your credit. In many cases, a person’s credit score will actually be improved by filing for bankruptcy.

You should be able to apply for credit cards after you receive your discharge in either Chapter 7 or Chapter 13 bankruptcy. A great place to start rebuilding your credit is with a secured credit card. This is a credit card where you make a deposit into a savings account and then you receive a line a credit for that amount, minus the annual fee that is assigned to that secured credit card. For example, if you make a deposit of $800 into the savings account and you have a secured credit card that has a $40 annual fee, your line of credit will be $760.

Retail credit cards, such as department store cards, are also a great way to start rebuilding your credit. Often, it is much easier to obtain a credit card from a retail store than it is from a bank after filing bankruptcy. Retail stores like gas stations and department stores are primarily in business to sell their products, not issue credit. With a credit card they can sell you more of their products. Therefore, many of their credit cards are easier to qualify for than other types of credit cards.

You may also be eligible for a mortgage in as little as 12 months after filing for bankruptcy. For more information on the waiting period to qualify for a mortgage after bankruptcy click here.

It is also important after receiving your discharge that you review your credit report on a semi-annual basis. The Fair Credit Reporting Act makes it so every person can receive one free credit report every 12 months at www.annualcreditreport.com. See 15 U.S.C. § 1681. Be careful of using another website for this service because it most likely will require a fee or come with hidden conditions.

When reviewing your credit report, there are two types of errors that you could come across: (1) information was added to your report that does not belong to you; and (2) an agency sent the report of a different person, even though the information is accurate. If you see a bankruptcy on your credit report that you did not file, it is imperative that you report it and dispute that information on your credit report. You must do this by initiating a dispute with the consumer reporting agency that keeps the report, and dispute the information directly with the furnisher.

Bankruptcy Law Firm
At Florida Law Advisers, P.A., we understand that filing for bankruptcy can be a very confusing and intimidating process.  That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you have an experienced bankruptcy attorney by your side throughout every phase of the bankruptcy process. We will help ensure your rights are protected, keep you well-informed, and help you receive the utmost relief bankruptcy can offer. To schedule a free consultation with a bankruptcy lawyer in Tampa call, email, or fill out an online inquiry on our website today.

 

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How Bankruptcy Affects Child Support & Alimony

Child support and alimony receive nearly the greatest level of protection when you file bankruptcy. Although child support is considered “unsecured debt,” which is typically dischargeable, the Bankruptcy Code provides special treatment for this domestic obligation. See bankruptcy law 11 U.S.C. § 507(a). Child support and alimony will be the first of the unsecured claims to be paid among all your other unsecured creditors. Keep in mind that child support and alimony obligations cannot be discharged through either Chapter 7 or 13 bankruptcy. See bankruptcy laws 11 U.S.C. § 727 & 1328. You will be responsible to continue making those payments to your former spouse during the life of your bankruptcy case, and after you receive your discharge. However, there may still be options to reduce the amount of child support, you should consult with a bankruptcy attorney. A bankruptcy lawyer can help describe some of the options that may be available to reduce your amount of child support.

If you are an individual who receives child support and/or alimony, you will be able to protect that income with the “support” federal exemption afforded to you by the Bankruptcy law. See 11 U.S.C. § 522. The entire amount that you receive from your former spouse will be protected, meaning that the trustee cannot take that income away from you. For information about a specific case or set of circumstances you should contact a bankruptcy law firm to schedule a consultation with a bankruptcy lawyer.

Child support and alimony will also receive protection under the “automatic stay” that takes place once you file bankruptcy. This takes effect immediately in order to preserve the property of the estate and to prevent any pre-petition claims from being paid outside of your bankruptcy. See bankruptcy law 11 U.S.C. § 362. However, if you have a judicial lien against you for failure to pay your child support or alimony obligations prior to you filing bankruptcy, the automatic stay will not apply to that judicial lien and you will be responsible to pay that lien amount. Again, this lien amount will not be discharged in either Chapter 7 or 13. For more information on discharge of debts in bankruptcy click here.

Additionally, if you are behind on your child support and/or alimony obligations, filing Chapter 13 may be a good avenue for you to get caught up on your payments. In fact, you would be required to pay any outstanding child support or alimony payments in full through the life of your Chapter 13 repayment plan in order to receive discharge. The benefit of having your child support/alimony obligations paid through your Chapter 13 plan is that it could potentially reduce the amount that you would have to pay back to other unsecured creditors and increase the amount of credit card or medical debt that would be discharged at the end of your Chapter 13 plan.

Bankruptcy Law Firm in Tamp
Bankruptcy law can be very confusing and intimidating. If you are considering seeking bankruptcy protection you should contact a Tampa bankruptcy lawyer at Florida Law Advisers, P.A. for legal advice. The bankruptcy attorneys at our firm have years of experience helping people just like you to solve their financial problems and obtain a fresh start. We have many options available that can help you successfully manage your debt and regain your financial health. Regardless if you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will provide you with competent legal advice you can trust. To see which options may be available to you, contact us to today to schedule a free, confidential consultation with a bankruptcy attorney at our firm.

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Do Student Loans Qualify for Bankruptcy?

While many types of debt are dischargeable in a Chapter 7 or Chapter 13 bankruptcy, student loan debt is usually not eligible for discharge. Unfortunately, no part of your student loans are able to be discharged, no matter which chapter of bankruptcy you file.  The Bankruptcy Code provides that student loan debt is one of the several non-dischargeable debts through bankruptcy. See bankruptcy law 11 U.S.C. § 523.  However, there is one exception to this non-dischargeability rule: if you can prove to the court that you suffer from an “undue hardship,” you may be able to have your student loan debt discharged.  This “undue hardship” usually pertains to debilitating medical conditions, but could be from a different form of hardship. Proving undue hardship can be difficult, if you need assistance with this matter it is highly recommend to retain a bankruptcy lawyer to assist you.

In bankruptcy case Brunner v. NY State Higher Educational Services, the Undue Hardship Test was established: in order to have student loan debt discharged, the debtor must prove that (1) he or she cannot maintain a “minimal standard of living”; (2) the debtor is undergoing special circumstances beyond the debtor’s control, and those conditions are likely to continue throughout the student loan repayment period; and (3) the debtor has, in good faith, tried to repay the loan.  If you can satisfy all three of those requirements, a judge may declare your student loan debt as dischargeable.  This is a case-by-case basis though, and the judge will look into your evidence of an undue hardship extensively.  This is not an easy feat and does not happen all that often. For information about a particular student loan contact a bankruptcy law firm in your area.

Additionally, student loan payments are not considered an allowable monthly expense under the Means Test. Click this link for more information on the Chapter 7 Means Test. Student loans are often not considered in the Means Test  because (1) the Bankruptcy Code does not allow it; and (2) most bankruptcy judges do not look at student loan payments as an expense this is “reasonable and necessary” for the maintenance of yourself and your dependents.  If you try and include your student loan payments in your Means Test calculation, a judge will most likely kick it back for recalculation, or the inclusion of the expense may even cause you to fail the Means Test and not qualify for chapter 7.  Including such payments in your Means Test calculation also establishes a “presumption of abuse,” which allows a court to dismiss your case. The Means Test can be difficult to master, especially if you have a case involving student loans. You should consult with a bankruptcy attorney for assistance with the Means Test.

Bankruptcy Law Firm
If you are having a difficult time meeting your financial obligations Florida Law Advisers may be able to help. The bankruptcy attorneys at our firm have years of experience helping people just like you to solve their financial problems and obtain a fresh start. We have many options available that can help you successfully manage your debt and regain your financial health. Regardless if you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will provide you with competent legal advice you can trust. To see which options may be available to you, contact us to today to schedule a free, confidential consultation with a Tampa bankruptcy attorney at our firm.

 

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Will I Lose My Property if I File for Chapter 7 or Chapter 13 Bankruptcy?

A term you will often hear, whether you file Chapter 7 or Chapter 13 bankruptcy, is “exemption.”  This is special protection that the Bankruptcy Code provides for a certain amount of value in your personal property.  See 11 U.S.C. § 522.  There are federal and state exemptions, and the state exemptions are different from state to state.  The difference in federal and state exemptions is the dollar amount of certain pieces of property that are protected from becoming property of the bankruptcy estate.

In order to determine which exemptions apply to your case, you must look at whether your state is an “opt-out” state.  “Opt-out” means that you are required to use your state’s exemption amounts—not federal.  Florida is an “opt-out” state.  So, if you file your case in Florida, you must use Florida’s exemptions for all of your property; you do not get to pick and choose whether you use federal exemptions on some pieces of property, and Florida exemptions on other pieces.  However, if your state is not an “opt-out” state, you are free to choose either federal or state exemptions to protect your property. Exemptions are vital to a bankruptcy case and can be difficult to master, if you need assistance contact a bankruptcy lawyer. A bankruptcy attorney should be able to structure your Chapter 7 or Chapter 13 in a way that maximizes the protection you can receive from exemptions

Typically, the most important exemption—especially in Florida—is the “homestead exemption.”  The Florida homestead exemption is one of the best in the nation in that it protects all of the equity in your home (meaning your house is worth more than you owe).  See Fla. Const. art. X, § 4. To enjoy the homestead exemption, you must be domiciled in Florida for 730 days prior to filing your bankruptcy petition.  “Domicile” is your place of residence with the intent to remain there permanently.

If you do not want to keep your home in bankruptcy and are not claiming the Florida homestead exemption, you can receive the “wildcard exemption.”  This provides you with $4,000 to apply to any piece of property you would like, whether it is your car, a diamond ring, or your favorite china set.  Fla. Stat. § 222.25.  It exists to allow you to pick and choose what is protected in your bankruptcy because it is important to you. A bankruptcy attorney experienced in wildcard exemptions can assist with this.  Although Florida has one of the most generous homestead exemptions, it does have lower exemption amounts than some federal exemptions.  Just remember, you cannot choose to use some federal exemptions in Florida; you must use Florida’s exemptions in your bankruptcy case.

There are other exemptions you can apply to a wide range of personal property as well.  Some examples are motor vehicles, boats, household furnishings, household goods, clothing, appliances, books, your pets/farm animals, crops, musical instruments, jewelry, tools of trade, health aids, life insurance policies, wages, and retirement accounts.  The exemptions are categorical and cannot spill over to other items.  For example, each person who files bankruptcy in Florida is given $1,000 to protect his or her car.  If you and your spouse are filing jointly, you will be given $2,000 towards your cars.  So, if you have a car worth only $750, you cannot put the leftover $250 towards protecting more of your jewelry or whatever else you are trying to protect—what you cannot use of the vehicle exemption, you lose. You should consider hiring a bankruptcy attorney to help structure your case to most effectively use Florida’s exemptions.

Bankruptcy Law Firm:
If you are struggling with debt Florida law advisers may be able to help get a fresh start without having to lose your property. Regardless if you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will provide you with competent legal advice you can trust. We are dedicated to providing effective representation, individualized attention, and affordable fees to our bankruptcy clients. All of our initial consultations are free and convenient payment plans are always available. Call us now at 800 990 7763 to speak with a Tampa bankruptcy lawyer.

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How Long Does The Automatic Stay Last

automatic stay is in place. See bankruptcy law 11 U.S.C. § 362(a). In most cases, the automatic stay will remain in effect until your bankruptcy case is discharged. The automatic stay is available under both Chapter 7 and Chapter 13 bankruptcy. If you are unsure about which Chapter is right for you speak with a bankruptcy attorney in your area. Florida Law Advisers, P.A. offers a free initial consultation for bankruptcy clients, to speak with a bankruptcy lawyer in Tampa click here.

If a secured creditor wants to move forward with collection efforts after the stay has been enacted, the creditor must first seek approval to do so from the bankruptcy court. This process will require notice to you (the debtor) and a hearing. See U.S. Supreme Court Case: Citizens Bank of Maryland v. Strumpf. If the judge grants the secured creditor the ability to move forward with their collection after the hearing, the automatic stay is considered to be “lifted” and the secured creditor can come after the piece of property that it wishes to repossess. An example of this process would be in a Chapter 7 where you choose to surrender your home. If the secured creditor wants to take your home from you, the creditor must go through the process of seeking approval from the court in order to do so. For more information about a creditor’s right to lift the automatic stay contact a bankruptcy lawyer in your area.

Although the automatic stay is usually in place during the life of your bankruptcy, it is automatically lifted as to all creditors once your case is closed out. See bankruptcy case Failla v. Citibank.  For example, if you did choose to surrender your home, the secured creditor can start the foreclosure process on your home as soon as the stay is lifted at the end of your case without first having to seek approval from the bankruptcy court. However, the creditor will be unable to continue with the foreclosure process until the stay has been lifted.

If there is a foreclosure pending against your home prior to filing bankruptcy and you want to keep your home, filing a bankruptcy petition will automatically stop that foreclosure process because of the automatic stay. You want to make sure that once you file your bankruptcy petition to stop the foreclosure action that you also file a “Suggestion of Bankruptcy” form in the state court foreclosure lawsuit right away. This must be done before the foreclosure sale date (if one has been set already) in order to stop the sale of your home. This assures that the state court judge is on notice of your bankruptcy so the foreclosure can be stopped on time.

The automatic stay does not apply to all types of debts and collection activities. Bankruptcy law provides for many exceptions from the automatic stay. A list of some of these exceptions are below, for a more complete list of exceptions see bankruptcy  law 11 USC §362 or contact a bankruptcy attorney.

Tampa Bankruptcy law firm:
At Florida Law Advisers, P.A., the Tampa bankruptcy attorneys have years of experience helping people just like you to solve their financial problems. We understand that these are very difficult times and we are here to help. We have many options available that can help you successfully manage your debt and regain your financial health. The right course of action will depend on the unique circumstances of your case. To see which options may be available to you, contact us to today to schedule a free, confidential consultation with a Tampa bankruptcy lawyer at our firm.

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How Does Bankruptcy Affect Social Security Benefits

Generally, your Social Security benefits are protected under Chapter 7 and Chapter 13 bankruptcy, meaning that the funds belong to you and the trustee cannot take them. See bankruptcy law 11 U.S.C. 522. The monthly benefits that you receive in Social Security are exempt from being seized or garnished. However, it is important that, prior to filing bankruptcy, you keep your Social Security income in a separate bank account from your regular funds. This is because a trustee will look at six months of bank statements up to the date of when you file your bankruptcy petition. If the trustee sees that your Social Security funds have been mixed in with your personal money, he or she can argue that you cannot differentiate and prove which funds are Social Security money and therefore cannot receive the Social Security exemption. This is one of the many reasons why it is important to have a bankruptcy attorney assist you.

If your Social Security benefits have already been mixed (or “comingled”) with your personal funds within one bank account, you may be able to still protect those Social Security funds by way of the “wildcard exemption.” For more information on exemptions click here. The wildcard exemption is an additional $4,000 that is allotted to you to protect your personal property, including income, if you do not own a homestead. See Florida Statute 222.25

In Chapter 7, you do not list your Social Security income on your Means Test, which determines whether you qualify for Chapter 7. Since you do not include your Social Security income on the Means Test, you have a greater chance of passing the test and qualifying for Chapter 7 because your income will be lower. The Bankruptcy Code provides that Social Security is not included in “current monthly income,” which is a required calculation under the Means Test, and therefore is protected from being included in the Means Test. See Bankruptcy law 11 USC 101. The means test can be very complicated, it is strongly recommended to hire a bankruptcy lawyer to assist you with filing for Chapter 7 bankruptcy.

Bankruptcy Law Firm
If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A. may be able to help. Our Tampa bankruptcy attorneys have years of experience helping people just like you solve their financial problems and obtain a fresh start. We combine our experience and skills in the courtroom with a thorough knowledge of the law to help achieve the results our clients need and deserve. When you hire Florida Law Advisers, P.A. you don’t just get legal advice, you get experienced bankruptcy lawyers by your side every step of the way. To learn more about how Florida exemption law can affect your bankruptcy call us today to speak with a bankruptcy lawyer at our firm.

 

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How to Get Permanent Alimony in Florida

Alimony, which is also commonly referred to as maintenance or spousal support is payment from one ex-spouse to the other. The fundamental principal behind an award for alimony is the disparity in financial resources of the two parties. However, disparity in financial resources alone is not enough to justify an award for alimony. See Rosen v. Rosen. Instead, Florida family law courts look at one spouse’s ability to pay alimony vs the other spouse’s need for alimony. See Florida divorce case Green v. Green. For information about a specific case or set of circumstances contact a divorce attorney in your area for assistance.

The amount and duration of any alimony award is determined on a case by case basis. The court will first determine if there is a need for alimony by one party, secondly, if the other party is able to pay alimony. Once that is determined, then the court must weigh the factors outlined in Florida divorce law 61.08. The statute also states that all other relevant factors can be considered when determining the amount and duration of the alimony award as the list of factors in the statute is not exclusive. An award of alimony may not leave the payor with significantly less net income than the income of the recipient unless there are exceptional circumstances found by the court.

One of the four types of alimony that a Florida family law judge can award is permanent alimony. Permanent alimony is appropriate when a party in the marriage lacks the ability to meet their needs and necessities of life following a divorce (dissolution of marriage). The needs and necessities of life of that party are determined by the standard of living during the marriage and if it is possible to maintain that lifestyle after the marriage ends. An award of permanent alimony should terminate upon the death of either party or upon the remarriage of the party receiving alimony.  Further, an award may be modified or terminated based upon a substantial change in circumstances. An example of a substantial change in circumstances is a supportive relationship of the party receiving alimony. However, the relationship must be in accordance with Florida divorce law 61.14.

In any award of alimony, the court may grant periodic payments or payments in lump sum or both. Although adultery is not considered in determining if a divorce should be granted, the court may consider the adultery of either spouse in determining the amount of alimony to be awarded. An award of permanent alimony is normally awarded after a marriage of long duration. A marriage of long duration is a rebuttable presumption of a minimum of seventeen (17) years. This is the presumed number, but the court can determine this to be inappropriate given certain circumstances. The length of the marriage is the period of time starting from the date of the marriage until the date of the filing of an action for dissolution of marriage (divorce).

An award of permanent alimony can be awarded after a marriage of moderate duration if such factors from Florida Statute 61.08 are considered and an award is determined to be appropriate based on clear and convincing evidence. The rebuttable presumption of a moderate duration marriage is between seven (7) and seventeen (17) years. An award of permanent alimony can be awarded after a marriage of short duration only if there are written findings by the court of exceptional circumstances.

Another qualification a Florida family law judge must consider is whether any other form of alimony is appropriate. If an award of alimony that is only temporary can be found to be appropriate than an award of permanent alimony is not appropriate. The court will only grant an award of permanent alimony if there is nothing else that will be sufficient given the circumstances of that individual case.

Divorce Law Firm
A skilled divorce lawyer can make a big impact in a divorce involving a claim for alimony. If you are considering filing for divorce or your spouse has already filed for divorce, call us today to speak with a divorce attorney at our firm. The divorce lawyers at Florida Law Advisers, P.A. have years of experience in both advocating for and against alimony. With years of experience in family law litigation, we are more than ready to present a compelling case on your behalf and stand firm for what is fair. To schedule a free consultation with a divorce attorney at our firm call us today at 800 990 7763.

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How Bankruptcy Can Stop an HOA Foreclosure in Florida

Florida is a judicial foreclosure state, that means a party seeking to foreclose a home must go to court and receive approval from a judge before a home is sold at a foreclosure action. This includes not just banks, homeowners associations (HOA) must also go through the court process before foreclosing on a home located in Florida. Unfortunately, many HOA’s are very aggressive and will seek foreclosure if a homeowner fails to pay the HOA dues and assessments. Homeowners facing foreclosure by their HOA should contact a bankruptcy attorney for assistance. Bankruptcy can potentially provide many options to stop the foreclosure and help keep your home.

The Automatic Stay
When a debtor (borrower) files for bankruptcy an automatic stay is put in place as soon as the Chapter 7 or Chapter 13 bankruptcy is filed. See bankruptcy law 11 U.S. Code § 362.   The automatic stay requires all collection activity against the debtor to stop immediately, including a foreclosure sale that has already been scheduled. For more information on the automatic stay click here.

Chapter 13 Payment Plan
A Chapter 13 bankruptcy filing could allow you to avoid foreclosure all together by working out a repayment plan over a span of three to five (3-5) years for the arrearage, otherwise known as back-due payments.  Essentially, the homeowner will have a 60-month loan to repay the back-due HOA fees. Most of the time, the interest rate applied to these types of payment plans is around 6%.  For more information about a specific case or payment plan contact a bankruptcy lawyer in your area to schedule a consultation.

Lien Stripping
Under Chapter 13 bankruptcy law, junior liens (including mortgages or a homeowner’s association liens) can be stripped, or removed from homestead property. If the lien is stripped down to the market value, the remaining balance of the debt will be treated as an unsecured debt in bankruptcy. Unsecured creditors typically receive nothing or only a small amount of the balance before being discharged.  Further, after the discharge is granted in your bankruptcy case the lien holder (HOA) will be required to remove the lien from the property. For more information on why the discharge is so important click here.

Bankruptcy and Foreclosure Defense Law Firm:
If you are thinking about filing for bankruptcy or are being threatened with foreclosure contact Florida Law Advisers, P.A. Our bankruptcy attorneys in Tampa are experienced in both bankruptcy and foreclosure defense. Every foreclosure and bankruptcy case is different, and our vast experience allows us to cater our services to each client’s individual needs. All of our initial consultations are free and convenient payment plans are always available. Regardless, if you need help with Chapter 13, Chapter 7, or foreclosure defense our professional legal team will provide you with competent legal advice you can trust. Call us now at 800 990 7763 to speak with a lawyer, we are available to answer your calls 24/7.

 

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What Happens to Property in Bankruptcy

Many people who choose to file Chapter 7 do so because they can no longer afford to stay in their home, and/or want to be relieved of their car loan. In Chapter 7, you have three options when it comes to your secured debt, and you must file a statement of intention as to those secured debts within 30 days of filing your bankruptcy petition. See bankruptcy law  11 U.S.C. § 521. It is highly recommended to consult with a bankruptcy attorney prior to completing you statement of intentions. Without competent advice you may accidentally limit the amount of relief bankruptcy can provide. For information on how to treat debt in a specific case contact a bankruptcy law firm in your area.

The first option is to reaffirm the debt. This essentially creates a new loan agreement between you and the lender, where you agree to pay your loan amount in full, at an agreed interest rate, within a certain amount of time.  If a reaffirmation agreement is signed by you, your lender, and approved by the bankruptcy judge, then it will be legally binding on the parties.  Once a reaffirmation agreement is finalized, this debt will no longer be dischargeable because you are agreeing to pay the full amount and to not stop making payments.  If for some reason you stop making payments on a car loan after entering into a reaffirmation agreement, the lender not only can repossess your vehicle, but you also become personally liable for that remaining debt and the lender can obtain a judgment against you. So, make sure you truly want to keep that vehicle (or home) before entering into a reaffirmation agreement.

The second option is to redeem your property. This means that you, or someone on your behalf, who can pay the remainder of the loan in full, in cash, at that moment.  If you have someone that can do that and you choose to redeem the property, then you will own it free and clear of any liens.  However, careful consideration should be taken before redeeming property. Consult with a bankruptcy lawyer to see if this option is right for you.

The third option is to surrender your property. If you choose to surrender your home in Florida, you are walking away from it, handing it over to the trustee assigned to your case (or the creditor if the trustee does not want to sell the property), and you are not allowed to defend a foreclosure action against your home after you receive discharge. See  bankruptcy case Failla v. Citibank . When you choose to surrender real or personal property, you will no longer be personally liable for the debt connected to that piece of property (this includes your car if you choose to surrender it). The surrender option exists to give you a “fresh start” and a creditor cannot later come after you for the amount discharged from your decision to surrender.

Additionally, property may be kept if it qualifies for an exemption. Exempt property is property that you do not have to forfeit when filing for bankruptcy and are instead entitled to keep. For more information on bankruptcy exemptions click here.

Bankruptcy Law Firm
If you are struggling with debt Florida law advisers may be able to help get a fresh start without having to lose your property. Regardless if you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will provide you with competent legal advice you can trust. We are dedicated to providing effective representation, individualized attention, and affordable fees to our bankruptcy clients. All of our initial consultations are free and convenient payment plans are always available. Call us now at 800 990 7763 to speak with a Tampa bankruptcy lawyer.

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Debts Which Survive Bankruptcy

If a debt is discharged in bankruptcy the borrower (debtor) will be released from all personal liability on the debt. Further, the bankruptcy discharge prohibits a creditor from taking any collection action against the borrower. In most cases, obtaining a discharge will be the primary reason why a borrower files for bankruptcy. However, there are many nuances of bankruptcy law which can prevent a discharge of certain debts. Therefore, it is important to seek the advice and counsel of a bankruptcy attorney when pursuing relief from Chapter 7 or Chapter 13.  For instance, debts are treated differently under bankruptcy law depending on the type of debt.

Debt is categorized into two types: secured and unsecured. First, think of secured debt as something tangible (i.e., a home or a car). A secured creditor is one who has a specific piece of collateral securing debt, which will be used to pay their claim against you in your bankruptcy case. That creditor may be able to take that collateral back once you file bankruptcy in order to get paid. In Chapter 7 and 13, the value of a secured debt on personal property is determined by the replacement value of that piece of property as of the date you file your bankruptcy petition. See bankruptcy law 11 U.S.C. 506(a)(2). Additionally, secured debt/creditors have first priority in being paid back through your bankruptcy estate over other creditors, but they are not known as “priority secured creditors” because no such title exists. The term “priority” only applies to unsecured debt, as discussed below. For more information on the priority of a specific debt contact a bankruptcy lawyer in your area.

Second, think of unsecured debt as something that cannot be physically taken away from you and sold (such as credit card debt, medical bills, student loans, alimony, child support, etc.). Additionally, there are two forms of unsecured debt: priority and general (also known as “nonpriority”). Priority unsecured debts are ones that the Bankruptcy Code gives special protection to; they will be paid first among all the other unsecured creditors (but they do not have priority over secured debt/creditors). See bankruptcy law 11 U.S.C. § 507. Examples of priority unsecured debt are child support and alimony, administrative expenses (such as taxes and fines), governmental claims (such as income tax for at least three filings, property tax for the last year, and employment tax for the past three years), FDIC claims, and property claims (up to $2,775, such as rent).

General (or “nonpriority”) unsecured debt are ones that will likely not get paid anything over the course of your bankruptcy and will ultimately be discharged (unless if it is one of the nondischargeable, general unsecured debts, such as student loans). Properly classifying debts can be complicated, if you need assistance contact a bankruptcy attorney for help.

Bankruptcy Law Firm in the Tampa Bay Area:
If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A. may be able to help. We are a customer service oriented bankruptcy law firm, committed to  providing personalized attention and dedicated legal counsel. All of our initial consultations are free and convenient payment plans are always available. Regardless, if you need help with Chapter 13, Chapter 7, or other debt relief our professional legal team will provide you with competent legal advice you can trust. Call us now at 800 990 7763 to speak with a Tampa bankruptcy lawyer

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