So many people across the state of Florida are struggling financially these days. Being buried under mounds of debt can make any person feel overwhelmed. As dire as the situation may seem, filing for Chapter 7 bankruptcy could help those who are buried in debt get their finances under control. Although filing for bankruptcy is never a fun thing to think about, there are some circumstances that may make it a smart financial decision.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is designed for individuals who are no longer able to otherwise pay their debts. In Chapter 7 bankruptcy, the court-appointed trustee liquidates assets to pay off as much unsecured debt as possible, such as medical bills or credit card debt. However, simply being in debt doesn’t automatically mean bankruptcy is the best option.
The following situations are when filing for bankruptcy could be the best course of action:
- When creditors are suing for unpaid debts
- Garnishment of wages
- Using credit cards to pay debts
- Using retirement funds to pay debts
- When revolving debt is greater than annual income
- When facing vehicle repossession or home foreclosure
It is also important to know that filing for Chapter 7 bankruptcy can take anywhere from three to six months, and an individual may keep any assets that the state considers exempt.
Filing for Chapter 7 bankruptcy does not come without consequences. A Chapter 7 bankruptcy will stay on a person’s credit report for at least 10 years and could also require a court visit or two. Any Florida resident who has questions about filing for bankruptcy can benefit by consulting a legal representative who specializes in bankruptcy law. A knowledgeable attorney can provide guidance and protection throughout the bankruptcy process.