Florida Bankruptcy Facts

Complete Information About Filing Bankruptcy in Florida

Filing bankruptcy can relieve the stress you are feeling due to not being able to pay your bills. The average bankruptcy filer has lost significant income due to a serious medical issue, lost employment or divorce.

Bankruptcy doesn’t have to be embarrassing; it is designed to give you a new start. When you file bankruptcy, creditors will immediately stop calling or mailing you, so you can focus on getting your life back together.

When you have to file for bankruptcy, it is critical to know your legal rights and remedies. Bankruptcy laws protect consumers from financial ruin and the potential to be abused by creditors.

Let Lehn Law’s Joseph W. Lehn, a Sarasota and Port Charlotte bankruptcy attorney who has helped people eliminate millions of dollars of debt, help younin bankruptcy court.


Your home, Your car, Your Wages.

Joseph W. Lehn helps people file for Florida Bankruptcy relief under the Florida bankruptcy code.

Your ability to rebuild credit after bankruptcy is better than it has ever been. After you get your discharge, you will receive many solicitations from lenders offering to finance homes, vehicles, and credit cards.


Here are some tips to responsibly and successfully rebuild your credit:

There are several tips to consider when trying to rebuild your credit after bankruptcy. They include:

  1. Pay your utility bills and rent on time for at least a year.
  2. Open a checking or savings account. Lenders may look at this to determine if you can responsibly handle money.
  3. Find a friend or relative to cosign for you on a loan and pay it on time.
  4. Look for car dealers and mortgage brokers that attest to be “bankruptcy friendly.”
  5. Buy a used car so you do not get hit with the depreciation that occurs during the first two years of a new car purchase.
  6. Stay away from payday loans that are high-interest rates and are a “bad credit” trap.
  7. Write a letter to each credit reporting agency explaining the circumstances that lead to your filing.
  8. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you do not need. Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.
  9. Pay your reaffirmed, pre-bankruptcy debts on time.
  10. Apply for store and gas credit cards that you would normally pay cash.

Although there are other methods to improve your credit, these are the easiest to implement.

It Is Important to Protect Cosigners

Your cosigners receive the same protection that you receive under Chapter 13 bankruptcy. Through a Chapter 13 bankruptcy, we will protect your cosigners from collection activity, and the creditors must wait to be paid.

For instance, if your friend or relative cosigned on your vehicle, and you are having trouble affording payments, we can put your remaining balance inside a Chapter 13 bankruptcy.


Understand the Chapter 7 Bankruptcy Basics

Chapter 7 bankruptcy is the most forgiving for an individual or couple.

  • What is Chapter 7 Bankruptcy? It is a process provided for under United States Federal Bankruptcy Law by which you are entitled to a fresh start.
  • Chapter 7 bankruptcy may eliminate most kinds of unsecured debt. Some examples of unsecured debts Chapter 7 may eliminate include:
    • credit cards
    • medical bills
    • most personal loans
    • judgments resulting from car accidents
    • deficiencies on repossessed vehicles

In addition to getting rid of your debt, Chapter 7 bankruptcy allows you to typically keep all of your property. As long as your car and mortgage payments are current, and there is no significant equity in your property, we should have no problem making the arrangements for you to reaffirm the debt; that is our goal with Chapter 7.


Understand the Chapter 11 Bankruptcy Basics

As opposed to Chapter 7, Chapter 11 bankruptcy is submitted mostly to rearrange your personal operating company. A normal Chapter 11 is provided for a business that, although it is creating cash, it remains in monetary distress due to bad management choices.

Chapter 11 was developed to provide your store or service industry the possibility to do the following:

  • Reorganize a few of its protected obligations
  • Discount certain unsecured financial obligations
  • Outgrow its monetary distress

A specific debtor can likewise submit Chapter 11 to rearrange their individual monetary scenario when their financial obligation levels surpass those permitted by a Chapter 13 reorganization (described below). With offices in Sarasota and Port Charlotte, Joseph W. Lehn can help explain the specifics.


Further Chapter 11 FAQS

Chapter 11 bankruptcy, like insolvency under other chapters, begins with the basic filing of a bankruptcy petition, supporting schedules, and a declaration of specific monetary affairs. These are the same forms needed in a personal bankruptcy case, such as Chapter 7, other than that, a few of the concerns are responded to differently since the debtor is an operating business.

Chapter 11 bankruptcy is different from personal bankruptcy from the initial filings, which are called “first day motions.” Upon submitting a Chapter 11, an operating business needs court approval to continue in its day-to-day operations. Instant approval is required to pay the existing workers and to fulfill payment of the incomes that accumulated before the filing.

Wage payments are required so that the staff members of the insolvent company do not resign or begin looking for other work. First day motions and orders are provided so that the operating organization can pay:

  • Employees
  • Providers
  • Suppliers

As well as other individuals and entities that the business requires to continue conducting business. The primary distinction in Chapter 11 bankruptcy for the owner of the organization is that the owner generally remains in charge of business and the company stays in operation.

Of course, if the owner has actually been linked to scams or gross mismanagement, then he or she will most likely not remain in charge. Chapter 11 allows an insolvent business to pay the owner a sensible wage according to the bankruptcy court’s approval.

The court will take a look at just how much the debtor was paying the owners before filing. If the owner has actually not been taking an income, the Court will most likely not permit an income to be paid after the business files for bankruptcy.

If the business does not produce an adequate amount of cash to pay its debts, the court will most likely not enable the owner to receive payments or to pay salaries. After filing insolvency, if the business does not create sufficient cash to pay all of its post‑filing financial obligations with some leftover, the owner’s earnings will be surrendered and not paid in future months even if cash is offered.

Understand the Chapter 13 Bankruptcy Basics

There are several ways in which this type of bankruptcy differs from the others:

  • Are you trying to save your home from a foreclosure? Is the “repo” man looking for your car? If so, Chapter 13 bankruptcy repayment plan may be the answer!
  • What is Florida bankruptcy? It is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.
  • One very important thing to remember about Florida bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must be able to make a payment to the court to consolidate your debts.
  • Debts that are generally consolidated in this type of bankruptcy are:
    • mortgage arrears
    • balances on vehicle loans
    • student loans
    • credit card debts
    • other secured debts
  • All outstanding debts must be included in the Chapter 13 bankruptcy consolidation.


Stop Foreclosure Immediately to Protect Your Estate

  • If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure process any time prior to the sale, and allow you to repay your mortgage arrears through your bankruptcy case.
  • You will still be obligated to make all future mortgage payments directly to the mortgage company, but they may not foreclose to collect any outstanding mortgage payments.


How to Keep Your Car and Maintain Your Freedom

  • If the repossession man is looking for your car, a Chapter 13 bankruptcy will also stop the finance company from repossessing your car.
  • The past due payments and the entire balance on your vehicle loan will be consolidated, which you will pay off over the next three to five years. The vehicle finance company can no longer repossess you car, and you will no longer have to make a payment directly to the finance company.
  • Only one payment is made, and that is to the Chapter 13 trustee.
  • Under certain circumstances, we can even recover your vehicle after repossession and consolidate the remaining balance in bankruptcy court.

When seeking a lawyer to handle your financial issues, research the testimonials of their prior clients.

Consolidate Student Loans

  • Student loans can be consolidated with other bills in a Chapter 13 bankruptcy.  Be advised, though, that whatever rate your loans are consolidated at will be locked in regardless of future fluctuations in interest.

Beware of Refinancing

Contact us before refinancing.

  • If you have equity in your home, you can file a Chapter 13 bankruptcy, protect your equity, and repay your mortgage arrears over as long as three years.
  • Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford, instead of repaying your mortgage arrears through a Chapter 13 Bankruptcy. Why eat up your equity with another mortgage?

You should explore all of your options including chapter 7, and make sure you contact a bankruptcy attorney along the way so we may advise you or your legal rights.

When you have quality legal representation, you become knowledgeable about your rights, and become less vulnerable to people trying to take advantage of you in a time of distress.

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