Bankruptcy is a way to put the past behind you and to move more confidently into the future, but this should only be done when you’ve considered all your options before filing bankruptcy. Speaking with an experienced lawyer can help you determine when this is the most appropriate option for you so that you feel confident in your decision and have clarity around this being the best option for you.

Bankruptcy is a way to put the past behind you and to move more confidently into the future, but this should only be done when you’ve considered all your options before filing bankruptcy. Speaking with an experienced lawyer can help you determine when this is the most appropriate option for you so that you feel confident in your decision and have clarity around this being the best option for you.

How to Know When It’s Time to Consider Filing Bankruptcy
If you’re making minimum payments on your credit cards or are behind on your mortgage because of COVID-19 or any other reason or you are behind on your car payments or owe IRS, now is the time to consider filing bankruptcy. Whether or not this is the right decision depends on a few factors, including the type of debt you have and what property is currently owned by you.

For most people, the final straw is when your creditors and debt collectors have become a consistent source of stress in your life. When it feels like there’s no chance to get ahead and you’re dreading each day because it just represents more phone calls and letters in the mail about debt you can’t keep up with, it’s time to discuss filing bankruptcy with an attorney. If you’re dealing with an advanced situation like foreclosure, too, this is the time to meet with a lawyer to walk through your options.

Debt Consolidation – Know The Risks Involved

Most people on the verge of filing bankruptcy have already explored other opportunities to close out the debt such as debt consolidation. Debt consolidation can only work as an alternative to filing bankruptcy in FL when you have funds to pay back your debts. Even if you do work something out with your creditors to make a lump-sum payment in an amount less than the full amount, you may have a tax liability for the amount you didn’t pay. There is no tax liability if you file a bankruptcy.

Remember that not all debt consolidation companies are created equally; most charge extremely high fees and you’ll only end up even further behind with your finances. Also most of those fees are up front costs to the consolidation company.

Don’t Believe The Hype

There’s a lot of advertising out there about debt settlement making it seem like this is the answer to all your debt issues. But debt settlement is often not the best way to close out your financial problems; in fact, for many, it just adds more interest accumulation during the time you investigate this as an option.

Here are some of the challenges with debt settlement:

• There are no guaranteed outcomes; if a creditor declines to settle, you’re still stuck with the debt

• Many debt settlements might require you to pay off the negotiated amount in a lump sum

• The IRS might treat your forgiven debt as income, meaning you’d be responsible for taxes on it

As you can see, there are a lot of potential negatives to going the routes of debt settlement or debt consolidation. Although the advertising is slick, if you can’t get the creditors to agree or you don’t have the funds to keep up with the payments required by either one of these options, you’re still struggling to catch up.

What Debts Can be Discharged when Filing Bankruptcy?

Most unsecured consumer debts can be eliminated by filing Chapter 7 bankruptcy. These include medical bills, credit card charges, personal loans, utility bills, and even defaulted rent. There are some debts which may or may not be eliminated. For example, some IRS debt must be paid back. If you have criminal restitution, that cannot be eliminated.

In Chapter 13 bankruptcy, certain debts can be discharged that are not allowed under Chapter 7. This includes debts to pay non-dischargeable taxes, debts from any divorce settlements over property, and debts for willful and malicious injury to a person. When filing bankruptcy under Chapter 13, you are responsible for making full payments on priority claims i.e child support or alimony. However, some debts that are not able to be eliminated in a Chapter 7 bankruptcy, like equitable distribution in a divorce, can be eliminated in a Chapter 13.

If you’re not sure whether to file Chapter 13 or Chapter 7, a meeting with our FL bankruptcy lawyers will give you a clear picture of your options so that you can make the best choice for you and your family. Schedule a free consultation today to work through your personal financial picture and decide whether now is the time to file.