Even when people know that bankruptcy can provide the fresh financial start they need, they are often still hesitant to take the first step.
Whether they are worried about a certain stigma associated with filing bankruptcy, or they want to protect their credit score, there are many reasons people put off filing bankruptcy.
If you have considered filing bankruptcy so you can start over with a clean financial slate, it is important to speak to a Pompano Beach, FL bankruptcy attorney first.
One of our attorneys can advise you of the process and make sure you are fully prepared so you know what to expect.
Common Types of Bankruptcy Filed in Pompano Beach
There are many different types of bankruptcy a person can file in Pompano Beach, and throughout Florida.
Of all of these, there are some types that people file more often than others.
Before you file, it is important to understand the different types of bankruptcy, as the one you file will have a significant impact on your case, as well as the amount of debt, if any, you can discharge.
The three types of bankruptcy that are most common are as follows:
- Chapter 7 bankruptcy: Perhaps the most common type of bankruptcy filed in Pompano Beach, Chapter 7 bankruptcy will allow you to discharge most or all of your debt. Bankruptcy laws introduced in 2005 drastically changed the requirements for filing Chapter 7 bankruptcy. One of these requirements is that you must pass a means test, showing that you do not have sufficient income to cover your debt. You may have to forfeit some of your property during the Chapter 7 bankruptcy process, but many borrowers do not lose anything after they file.
- Chapter 13 bankruptcy: Chapter 13 bankruptcy is a great option for borrowers who do not qualify for Chapter 7, as there is no means test requirement. You also will not lose any property during a Chapter 13 bankruptcy. During a Chapter 13 bankruptcy, the majority of your debt is not actually discharged. Instead, it is restructured into a repayment plan, which usually extends between three and five years. Although you are still responsible for repaying the debt, the payments are more manageable and more affordable for you to pay.
- Chapter 11 bankruptcy: Many people think Chapter 11 bankruptcy is reserved for businesses. Although it is true that companies often file Chapter 11 when they fall into difficult financial times, this type of bankruptcy is also appropriate for individuals who have higher amounts of debt than a Chapter 7 or Chapter 13 bankruptcy can deal with. Chapter 11 bankruptcies can take a very long time, as they often entail complex details.
It is not always easy to know which type of bankruptcy is right for you. A Pompano Beach bankruptcy lawyer can inform you of all of your options and advise you on the path that is right for you.
How Filing Bankruptcy Will Impact Your Credit
It is true that no matter the type of bankruptcy you file, or how successful your case is, it will affect your credit score.
A record of bankruptcy on your credit report shows that at one point, your debt levels were too high and unmanageable for you. As such, your credit score will drop and it may be difficult to obtain loans or credit, at least for a short period of time.
A bankruptcy can stay on your credit report for up to ten years, but that does not mean that your credit score will be low that entire time.
If you wish to purchase a home after filing bankruptcy and you are going to use a government agency such as Veteran Affairs, Fannie Mae, or the FHA, you must wait two years after your bankruptcy case is finalized to apply.
While purchasing a home can be a bit more problematic in the immediate time following bankruptcy, you can apply for other types of loans and credit that can help increase your score. Many creditors focus their marketing efforts on people who have recently filed for bankruptcy. They understand that these individuals are looking to rebuild their credit and approving them for a credit card or loan can help them do that.
A credit card lawyer will warn clients that applying for a credit card can be a good strategy to help their credit score in the long run, but it is critical that you do not take on more debt than they can afford.
You do not want to be in the same financial position that led you to bankruptcy and in some cases, you may not be able to file again for some time. If you filed Chapter 7, for example, you cannot file another Chapter 7 bankruptcy for eight years.
Using Bankruptcy to Stop Foreclosure in Pompano Beach, FL
A very common defense to foreclosure is for the homeowner to file bankruptcy. Mortgage loans can be discharged either partly or entirely during a Chapter 7 bankruptcy, and you may not even lose your home.
Florida has one of the most generous homestead exemptions in the country and under the law, you can keep up to 100 percent of the equity within your home. As soon as you file for bankruptcy, the bankruptcy court will issue an automatic stay. The automatic stay prevents creditors and other lenders from taking any action to collect on the debt, something our debt defense lawyer in Pompano Beach is familiar with.
Creditors and lenders cannot contact you to try and collect the amount owed, and they cannot take legal action against you, such as filing a lawsuit.
The automatic stay will also stop a foreclosure action, at least temporarily, even if the bankruptcy is filed just before a foreclosure sale. The automatic stay is in effect until your bankruptcy case is finalized, allowing you to stay in your home during that time.
Talk with a Pompano Beach Bankruptcy Attorney Near You Today
If you would like to learn more about filing bankruptcy and how it can give you a fresh start, talk with a Pompano Beach bankruptcy attorney near you at Loan Lawyers today.
We will answer all of your questions, prepare you for the process, and give you the best chance of a successful outcome.
Call us now at (954) 523-4357 or contact us online to schedule a free consultation.
What Our Clients Say About Our Team of Bankruptcy Attorneys
Read this 5-star Google review below regarding a bankruptcy case “If you are in financial distress and looking for an office that will help you towards the journey of bankruptcy filling please look no further. I knew nothing about bankruptcy and they were so patient with me. They explained everything to me and led me through each and every step. The trustee attempted to take my car as asset but they worked their magic and the trustee decided to take no further interest in my car which I’m beyond grateful for. The professionalism and on going communication and the ability to go above and beyond is why I recommend Loan Lawyers.”
By: Bee Rating: 5/5 ⭐⭐⭐⭐⭐ Read more reviews on Google!
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