Miami Florida Bankruptcy Blog

Posts Tagged ‘Bankruptcy Gives You A Fresh Start’

A Chapter 13 Bankruptcy may be the right option for you if you are behind on your bills and feel as if you are falling further and further behind, with little or no hope of ever catching up. A Chapter 13 Bankruptcy may provide you with the opportunity to reorganize all of your monthly payments into one low monthly payment that you can afford. This probably sounds too good to be true. Well, its true, a Chapter 13 Bankruptcy provides you the opportunity to reorganize your debts to allow you to regain control of your financial future.

Chapter 13 is used most often to save a house from a foreclosure sale. Chapter 13 is also useful to eliminate some IRS debt and to establish an affordable plan to pay IRS debt that cannot be eliminated. Chapter 13 bankruptcy is available to debtors with regular income. A business cannot file Chapter 13. In addition, there are upper limits on the amount of the individual’s secured and unsecured debts in Chapter 13 cases.

If you are an individual or a sole proprietor, you can file a Chapter 13 bankruptcy to pay off all or part of your debts over three to five years. Rather than wiping out debts immediately, this option allows you to reorganize them so you have time to pay.

Most people who file Chapter 13 bankruptcies have:

· Mortgages or other loans they would like to bring current, so they don’t lose their homes or other property

· Taxes, child support or student loans that can’t be wiped out by Chapter 7 bankruptcy

· Moral convictions that all debts should be paid no matter how long it takes

For a Chapter 13 bankruptcy, you’ll need a stable income with disposable income (income left over after you pay the bare necessities of life such as shelter, food and utilities).

Matthew E. Mazur, Jr. Esq., is the managing shareholder of Matthew Mazur, P.A., a Coral Gables, Florida based law firm that represents clients in Bankrutpcy matters. For more information please visit www.coralgablesbankruptcyattorney.com.

A lot of people have the misunderstanding that they will never be able to buy a home again if they file a Chapter 7 Bankruptcy. Well, that was true way back when, but not today. There are thousands of FHA and VA assumable loans. You will have to save up some cash, but you will be able to buy property again.

You may also have had the understanding that you won’t be able to buy a car after fling a Chapter 7 Bankruptcy. Again, not true. When you file a Chapter 7 Bankruptcy, you get rid of all of your debts. You are a good risk to a car dealer. The car dealer will look at dealing with you as an opportunity to maybe charge you a little bit more interest and ask you for a little bit more money as a down payment. The car dealer knows you are not going to do a bankruptcy again any time soon and that you are trying to rebuild your credit.

You may also have a misunderstanding about Credit Cards after a Chapter 7 Bankruptcy. You may believe that you will never be able to get another credit card again if you file a Chapter 7 Bankruptcy. Again, this is just not true. There are banks that will allow you to have a credit card (Visa or Mastercard) if you open a savings account with them and use the savings account as collateral. We will give you a list of these banks when your case is discharged and you are ready to start rebuilding your credit. This is known as a secured credit card, meaning your credit limit will be dictated by the amount of money you maintain in your savings account. It is a good start to rebuilding your credit.

If you buy a car after your Chapter 7 and establish a secured credit card account, you are well on your way to rebuilding your credit history. You are now making payments on your car. You are now making payments to your secured credit card. You are now able to cash checks. After a year or two of re-establishing your credit, conventional lenders, such as banks and savings and loans, will consider you for a house loan. After four years, the Federal Housing Administration will consider you for a low interest home loan. In a nutshell you will have cleaned your financial slate and built up a credit history that will enable you to do the things you want to do.

Now, there are probably some of you out there wondering about the impact of a Chapter 7 Bankruptcy on your credit report. Well, it is more likely than not that your credit report already does not look so good. The Chapter 7 Bankruptcy will stop the aging process of the debts reported on your credit report. Simply put, debts that are two, three or four or more months behind will never get any older than that. That will look good for you on your credit report. If your debts are very old, then you might as well get rid of them and start over with a clean slate through a Chapter 7 Bankruptcy, if you can. It is important to remember that by stopping the aging process, the worst your credit report will ever look is the day your petition is filed.

In Chapter 7, all of the debtor’s assets, other than those types of assets specifically exempt from liquidation by statute, are turned over to a bankruptcy trustee for sale. Sale proceeds, if any, are distributed among the creditors. Most Florida Chapter 7 debtors have little non-exempt personal property because of Florida’s liberal exemption laws. Chapter 7 bankruptcy is used to eliminate, or discharge, primarily unsecured debts such as credit cards or medical bills. Chapter 7 does not eliminate secured debts, such as vehicles (unless the secured item is surrendered). Chapter 7 will not save a house from foreclosure nor a car from repossession if you are delinquent on payments.

Matthew E. Mazur, Jr. Esq., is the managing shareholder of Matthew Mazur, P.A., a Coral Gables, Florida based law firm that represents clients in Bankrutpcy matters. For more information please visit www.coralgablesbankruptcyattorney.com.