Mansfield and Bronstein works with clients who are struggling with overwhelming debt as a result of unemployment, divorce, health issues or failed business ventures.  Contrary to what is widely believed, filing for bankruptcy does not mean that an individual must relinquish everything he or she owns, nor does it mean that one’s credit is permanently ruined.  Rather, bankruptcy often provides the debtor with peace of mind and a fresh start, both financially and emotionally, without the constant harassment from creditors.

Bankruptcy Overview

–  Discharging debts in the Bankruptcy Court means that creditors can no longer attempt to collect on debts, nor can they make claims on the debtors future earnings.

–  Certain debts cannot be discharged in bankruptcy, including child support, student loans and taxes owed to the state or federal government.

–  Once an attorney has filed bankruptcy on your behalf, creditors are not legally allowed to pursue collections via phone or mail (referred to as an “automatic stay”)

–  A debtor may apply for and receive loans following a bankruptcy, but the rates will be much higher since the debtor will be considered “at risk.”

–  Filing bankruptcy can, at least temporarily, stop a repossession or foreclosure.

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is also referred to as a “complete” bankruptcy, since it eliminates all debt without holding the filer to repayment of any kind, Chapter 7 is the most common type of bankruptcy filed in the U.S.  People who owe large amounts of money to credit card companies, loan companies or hospitals but do not own enough assets to pay off these debts are often good candidates for Chapter 7.

State and federal laws regulate exemptions allowed in a Chapter 7 bankruptcy. However, all states allow filers to keep items such as household goods, clothing, at least one car and the home, if applicable. Since Florida does not allow bankruptcy clients to use exemptions as described by the federal government, having an experienced bankruptcy attorney managing the case and submitting documents on the debtor’s behalf can help the debtor retain most, if not all, of his or her assets.

Filing Chapter 7 provides expedited relief from stressful financial problems and is the best way to eliminate unsecured debts and stop wage garnishment that is not related to child support or alimony. Moreover, if the debtor’s driver’s license has been suspended because of unpaid parking tickets or driving without insurance, this type of bankruptcy may allow the license to be reinstated. Be aware that it cannot get a license back if it was revoked due to alcohol or drug-related charges.

Collection efforts made by the state or IRS can also be stopped after filing Chapter 7 bankruptcy. In addition, a partial amount of tax debt may be discharged in Chapter 7 if the court decides that the debts greatly exceed the debtor’s estimated future income.

To find out if you qualify for filing Chapter 7, contact Mansfield Bronstein, PA to meet with a bankruptcy attorney who will discuss your case with you and explain what to expect during a Chapter 7 bankruptcy procedure.

Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy filing, the debtor is not asking for the elimination of debts but the reorganization or restructuring of debts so that he or she can make one lump payment that will take care of all debts. Generally, a Chapter 13 repayment schedule continues for three to five years until the debtor no longer owes any debts. For people who are employed but behind on a home mortgage, vehicle payments, child support or back taxes, Chapter 13 is a way to avoid the potential credit damage incurred by filing Chapter 7. Chapter 13 is also the only alternative for individuals who are not eligible to file Chapter 7.

Eligibility requirements for filing Chapter 13 include:

–  The debtor lives in the U.S. and is filing as an individual. Chapter 13 cannot be filed by a partnership or corporation.

–  The debtor must show income that exceeds monthly expenditures. A repayment plan is negligible if the person filing Chapter 13 does not have enough income to make adequate payments on existing debts.

–  Unsecured debts owed cannot exceed $360,000. Secured debts cannot exceed $1 million.

–  The debtor cannot have filed a previous bankruptcy in the past 180 days that was dismissed.

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