BANKRUPTCY MAY ASSIST IN FINANCIAL STRESS
Bankruptcy is an option for some people who are overwhelmed by their debt. At times, stress is caused from debt related issues. This stress can lead to illness, loss of employment or even divorces. One could possibly avoid all the above mentioned issues by relieving their stress. Many times, filing bankruptcy is ones best option. It is important to understand filing for bankruptcy is not the end of the world. Filing bankruptcy provides an opportunity for one to repair and build credit. When filing a Chapter 7 bankruptcy all your debt is discharged, allowing you the opportunity to start fresh. In this economy, many people need the opportunity to start over.
In Florida, there are certain exemptions for residents who have lived in Florida over two (2) years. These exemptions would include the following:
Homestead exemption: A home which you own is considered ones homestead. If you wish to continue living in your home, you are “retaining” your homestead. Retaining your homestead allows you to exempt all of the equity in it, if in fact there is equity in the property.
Personal property exemption: In Florida, a person filing bankruptcy is allowed $1,000 in personal property if you are claiming your homestead exemption or $4,000 in personal property if you are not claiming your homestead exemption.
Vehicle exemption: In Florida, a personal filing bankruptcy is allowed $1,000.00 in exemption for a vehicle. If you do not use the total personal property exemption allowed, one may then use the balance towards the vehicle.
Retirement/Life Insurance benefits: Are 100% exempt in a bankruptcy, meaning that money will not be a part of the bankruptcy estate, meaning no one will touch your money.
Some debt that would not be dischargeable in a bankruptcy would include:
Student loans
Income taxes that are LESS than three (3) years old
Child support dues and/or divorce settlements
When considering this option, it is important to have an attorney whom you trust and feel comfortable with. If you have any questions concerning this matter, please feel free to contact the Law Office of Ray Garcia, P.A. for a free consultation at 305-227-4030.
Ray Garcia, Esq.
Board Certified in Real Estate Law
By the Florida Bar
www.raygarcialaw.com
Bankruptcy
Individuals can file for bankruptcy in a federal court under Chapter 7 (“straight bankruptcy”, or liquidation) or Chapter 13 (a “consumer reorganization”, or debt adjustment case). (Although individuals can technically file Chapter 11 bankruptcies, those filings are rare. They typically happen if the individual’s debt load is too high for a chapter 13 and they do not qualify for a chapter 7).
In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Most liens, however (such as real estate mortgages and security interests for car loans), survive. Many types of unsecured debt are legally discharged by the bankruptcy proceeding, but there are various types of debt that are not discharged in a Chapter 7. Common exceptions to discharge include child support, income taxes less than 3 years old and property taxes, student loans (unless the debtor prevails in a difficult-to-win adversary proceeding brought to determine the dischargeability of the student loan), and fines and restitution imposed by a court for any crimes committed by the debtor. Spousal Support is likewise not covered by a bankruptcy filing nor are property settlements through divorce. Despite the non-dischargeability of these debts, they must be listed on your bankruptcy schedules, as all debts (and all assets) must be listed.
