Checklist to Determine if Filing Bankruptcy in Fort Lauderdale Is Right For You
Filing for bankruptcy is not a decision that most people make lightly. The credit industry has spent decades programming the public that your credit score defines you - and we’ve bought into it for the most part. But sometimes, filing for bankruptcy is the remedy for a situation that is robbing you of your life’s energy.
So, the first thing that you probably already realize is that filing bankruptcy is more than just a financial decision. There’s emotion involved:
• You feel badly that you promised to pay a loan back and you just cannot do it
• You were raised with the strong belief that if you borrowed it, you MUST pay it back
• Things are going to turn around soon
• Everyone around you thinks bankruptcy is bad and only losers file
• You don’t want to ruin your credit score
• Religious beliefs regarding bankruptcy
I’ve heard all of these feelings and emotions from people who were getting information on the process of filing bankruptcy. The emotional turmoil is just as real as the real-life implications of filing bankruptcy. Since everyone is unique and has their own core set of beliefs about debt and how to deal with it, I can’t tell you if it’s right for you – that’s something that you need to decide once you get all the facts about filing bankruptcy in Ft Lauderdale. But I can help you make that decision by sharing what I’ve learned over many years of helping people make that decision
So, below is a short list that I’ve put together after talking to thousands of people who are stressed out over their debt. Only you can determine if filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy makes sense for you. These are some of the most common “moments of truth” that my clients had to face when making their decision.
Checklist For Deciding If Filing Bankruptcy is Right For You
1) Do you qualify for bankruptcy?
In 2005, Congress made some changes to the bankruptcy laws. You can only file a Chapter 7 bankruptcy if you pass the “means test.” The means test is designed to fairly and objectively determine if you have any disposable income left at the end of the month to pay something back to your creditors. The means test has pre-determined deductions for things like rent, utility, food, etc (we have to use their numbers even if you pay more for any of these items). If the means test determines that you have enough money left at the end of the month to pay creditors, then you cannot file Chapter 7 bankruptcy. But you can file a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy and sometimes it’s better to file a Chapter 13 bankruptcy even if you do qualify for a Chapter 7.
2) Do you realistically see your situation improving in the near future?
I say “realistically” because hope springs eternal and we always want to think that things are going to change soon. But sometimes, we do have a better paying job coming up soon or you know with certainty that you are receiving an inheritance or otherwise coming into money soon. The key word is “certainty.” If your current situation is temporary, it may be best to wait things out. On the other hand, if your situation is going to improve but it still won’t be enough to get you out of the financial hole that you’re in, or if you have a pending creditor action where you will lose assets such as your home or car – it may be best to file and have a fresh start when your situation does improve.
3) Is most of your debt unsecured credit?
The two most common types of debt that people have are categorized as “secure debt” and “unsecured debt.” Secured debt are things that have property guaranteeing repayment. Cars and homes are the most common items that fall under the secured debt category
. Sometimes people aren’t aware that they secured that air conditioner purchase with the actual unit or the jewelry they bought is secured by the jewelry. Some examples of unsecured debt are credit card balances, medical bills, collection accounts, personal signature loans and some SBA loans/PPE loans where you gave a personal guarantee.
If the bulk of your debt is unsecured, then you may want to give strong consideration to a Chapter 7 bankruptcy if you qualify. If you have a mix of both, a Chapter 13 may be a great option for keeping everything you own while getting rid of what you don’t want anymore – the debt!
Everything in life has its pros and cons and filing bankruptcy is no exception to that. Before filing bankruptcy, you should fully understand the pros and cons of bankruptcy. Will filing bankruptcy affect your employment? In 99% of the cases, it won’t – but an experienced bankruptcy attorney can probably answer that specific to your job. How long will it remain on your credit report? Seven years for a Chapter 13 and 10 years for a Chapter 7. How long before you can buy a house after filing bankruptcy? A lot sooner than you think! You can buy a house approximately 2 years after a Chapter 7 bankruptcy ends and you may be able to buy a house after making on-time payments in a Chapter 13 bankruptcy for at least a year.
But filing bankruptcy will also result in higher interest rates initially for cars and other types of credit. Time heals all things and the same goes for bankruptcy filings.
5) Do you have any other good options or can you ride out the creditor harassment?
Filing bankruptcy is not always the only answer to financial issues. Sometimes, working out a repayment plan with creditors (if you don’t have too many and if the creditors are reasonable) is a good alternative to bankruptcy. Creditors, however, are not known for their generosity when granting small monthly payments.
6) Are you comfortable walking away from your financial obligations?
Filing bankruptcy is two-parts emotional and one part procedural. Although the most common thing that I hear after filing is “I should have done this a long time ago,” – getting through the emotional conflict when considering bankruptcy should not be ignored. It’s normal to feel a lot of conflicting emotions when considering whether bankruptcy is right for you. Many people have to work through feelings of shame, depression, disappointment in themselves and their own self-judgment. I have had many clients who didn’t want anyone to know they filed bankruptcy come back to me and tell me how they realized that many of their friends and family had also filed and were keeping it hidden also. It’s not until one brave soul comes out of the “bankruptcy closet” that they all breathe a collective sigh of relief and realize that it’s nothing more than a legal procedure designed to give people a fresh start. Filing bankruptcy doesn’t mean you have failed at anything. It means that you choose to be debt free and stress free rather than live enslaved to your creditors.
7) Will you be in a better place if you file bankruptcy - both emotionally and financially?
When considering whether filing bankruptcy is right for you, the most important question to ask yourself is whether you will be better off emotionally and financially? If the stress of debt is robbing you of your happiness and peace – that alone, may be enough of a reason. Life is too short to waste it on things that are not important. I’m not saying that meeting financial obligations are not important. I’m saying that being happy, enjoying your family and friends without being burdened by financial stress and worry is more important. Your kids don’t know why you’re grumpy or depressed – they just know that you’re not the same and it affects them too. You are important to others and your emotional well-being is important to you and to them.
Find Out if Filing a Bankruptcy in Broward County is Right For You
The Bankruptcy Law Firm of Orfelia Mayor is a debt relief agency in Broward County that loves what they do!
We help people file for bankruptcy under the bankruptcy code. Make our day by letting us help you stop wage garnishment, stop foreclosure sales, stop car repos and just get you back into loving life! Your creditors have lawyers on their side – shouldn’t you have a lawyer too?Contact us today for a no-charge, no-obligation bankruptcy consultation
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