Fort Myers Bankruptcy Attorney: How Can Bankruptcy Help Me Find Financial Debt Relief?

Filing for bankruptcy may seem daunting, and you may have many questions about whether it’s the best path toward financial debt relief. How does bankruptcy work? And is it the right solution for you?

Fort Myers Bankruptcy Law FirmPersonal and small business bankruptcy can help you eliminate or repay your debt.  However, bankruptcy will hurt your credit. Seeking advice and assistance from a Fort Myers bankruptcy attorney can help you better understand and navigate the many factors to consider.

Keep reading to learn how bankruptcy can help you find financial debt relief and how our bankruptcy attorney services in Fort Myers are able to help you.

How can bankruptcy help me find financial debt relief?

Bankruptcy can help you find financial debt relief in two ways, by getting rid of your debts or developing a repayment plan.

When you file for bankruptcy, an automatic stay goes into effect. This stay prevents creditors from taking any collection actions against you, including wage garnishments, foreclosure, and repossession.

You can file for two main types of bankruptcy: Chapter 7 and Chapter 13. Both have their unique benefits and drawbacks.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as a “liquidation” bankruptcy, is used by individuals or businesses who cannot repay their debts. Chapter 7 filers must sell off any non-exempt assets they may have and use the proceeds to repay creditors.

This type of bankruptcy allows a person to discharge all their unsecured debt, such as credit card debt and medical bills. As a result, you’re no longer legally obligated to repay them.

In a Chapter 7 bankruptcy, the court appoints a trustee to oversee the case. The trustee is responsible for liquidating the debtor’s assets and distributing the proceeds to the creditors by priority, with secured creditors paid first, followed by unsecured creditors. After the final payment to the creditors, the debtor becomes discharged from their debts.

Benefits of Chapter 7 Bankruptcy

Chapter 7 Bankruptcy can help you get out of debt much faster than Chapter 13 because, once you sell your assets and use the proceeds to repay creditors, you’re no longer responsible for any remaining debt.

Also, you can keep more of your assets because filers in Chapter 7 bankruptcy are only required to sell off non-exempt assets.

What is Exempt Property?

Fortunately, you may not have to sell or liquidate every one of your assets.  Certain types of property are exempt from seizure in a Chapter 7 bankruptcy. The debtor gets to keep these assets, and creditors cannot take them to repay debts.

The types of exempt property may vary from state to state. In Florida, many forms of property may be exempted from liquidation in bankruptcy, including your home, automobile, some items of jewelry, professionally related tools, or specific amounts of money.

Chapter 13 Bankruptcy

Often referred to as a “reorganization” bankruptcy, Chapter 13 bankruptcy, on the other hand, does not require the individual to liquidate their assets. Instead, the debtor must make regular payments to the trustee, who then distributes the payments to the creditors.

The plan usually lasts three to five years and is based on the debtor’s ability to pay. Once you’ve made all your payments, any remaining debt will be discharged.

What are the benefits of Chapter 13 Bankruptcy?

Chapter 13 bankruptcy offers benefits that aren’t available under Chapter 7 bankruptcy.

  • Give you more time to repay what you owe.
  • Help you to catch up on missed payments and stop a foreclosure on your home.
  • Assist in keeping your property, such as a car or jewelry, that might be taken away in a Chapter 7 bankruptcy.
  • Enable you to repay your debts for less than the total amount you owe. You can also eliminate some types of debt.
  • It may stop wage garnishment and allow you to repay your debts.
  • Improve your credit score in the long run. Although bankruptcy will remain on your credit report for seven to 10 years, the impact of the bankruptcy on your credit score will lessen over time. And, as you begin to make payments under your repayment plan, your credit score will gradually improve.

Is bankruptcy an excellent way to get out of debt?

Filing for bankruptcy may seem like an excellent way to get out of debt, but it’s crucial to understand your options before making a decision. Speak with a bankruptcy attorney to better understand the potential benefits and consequences.

Here are a few things to consider when deciding if bankruptcy is the right choice for you.

  • Consider your goals. Are you looking to eliminate your debts? Or are you looking to develop a repayment plan?
  • Understand how bankruptcy impacts your credit score. Bankruptcy information remains on your credit report for ten years and can make it challenging to get approved for new lines of credit.
  • Look into your options. Bankruptcy should always be a last resort after trying other methods to get out of debt, such as debt negotiation with your creditors or seeking debt consolidation methods.

Debt Negotiation

Before filing for bankruptcy, consider debt negotiation first. The process of debt negotiation involves settling your debt with your creditors for a lower amount than what you owe.

Debt negotiation differs significantly from filing for bankruptcy. With bankruptcy, you essentially hand over control of your finances to a trustee who then works to pay off your debts. In the case of debt negotiation, you work with your creditors directly or through third-party assistance.

How can a bankruptcy attorney help with debt negotiation?

Negotiating to settle your debt for less than the total amount owed is complex, and you might need help knowing where to start. A bankruptcy attorney can help you understand your debt negotiation options and guide you on what to do. They can also help you negotiate with your creditors for a lower payment.

Benefits of Debt Negotiation Over Filing for Bankruptcy

Debt negotiation has the following advantages and benefits over filing for bankruptcy.

  • Lower the amount you owe.
  • Avoid collections.
  • Improve your credit score: When you settle your debt, it will be reported as “settled” on your credit report, which is better for your credit score than if it were reported as “defaulted.”

Foreclosure Defense

If you miss multiple mortgage payments or default on your loan, your home may be foreclosure. Foreclosure means your lender has started a legal process, such as filing a lawsuit to take home ownership.

If you’re facing foreclosure, you can defend yourself in court with a foreclosure defense. There are a few different ways to do this; however, winning can be difficult. A bankruptcy attorney can help you navigate your foreclosure defense and ensure you take advantage of all the protections available.

How can filing for bankruptcy help a foreclosure defense?

If you’re facing foreclosure, you can prevent or delay the process by filing for bankruptcy. A bankruptcy attorney can help you determine if this is the best option for you and guide you through the process.

Filing for bankruptcy can give you some breathing room by putting an automatic stay on all collection activity, including foreclosure. Since your lender can’t foreclose on your home while your bankruptcy case is pending, bankruptcy can stop the foreclosure process and give you time to catch up on your payments or sell the house.

Sometimes, you can use bankruptcy to eliminate your mortgage debt. It can also help you eliminate other obligations, like credit card debt.

Personal and Small Business Bankruptcy

There are primarily two bankruptcy options for business owners, personal bankruptcy and business bankruptcy. The right one depends on several factors, including your business type, the amount of debt you’re carrying, and your ability to repay that debt.

Personal Bankruptcy

As described above, personal bankruptcy is typically filed under either Chapter 7, which requires liquidating your assets to pay off creditors, or Chapter 13, which involves reorganizing your debt and creating a repayment plan.

Business Bankruptcy

Typically filed under Chapter 11, business bankruptcy allows you to reorganize your business and create a repayment plan for your creditors. Fortunately, under Chapter 11 bankruptcy, the business remains in operation during this legal process.

Suppose you’re considering bankruptcy for your small business. In that case, it’s essential to speak with an experienced bankruptcy attorney to discuss your options and determine which type of bankruptcy is right for you.

Contact a Fort Myers Bankruptcy Attorney

If you’re struggling under financial uncertainty, speak to a Fort Myers, Florida, Bankruptcy Attorney. We can help you look at your options for filing for bankruptcy and decide the best way to proceed. We have helped many families make debt freedom a reality. Contact us today and find out how we can help you.