While no one wants to fall behind on their debts, it does happen in some cases and it’s often unavoidable. When this does happen, it adversely affects your credit and it creates a situation that keeps getting worse. This creates an intolerable situation and, in many of these cases, filing for bankruptcy may be the best option.
There are two types of bankruptcy, but a Chapter 7 bankruptcy is the type that most people envision. In this type of bankruptcy, people suffering from mounting credit card bills, lawsuits, and other collections actions can obtain a new beginning. While a bankruptcy does show up on your credit report, it can often be a better alternative than continuing to build debt and risk liens, garnished wages, or worse.
Although a bankruptcy can affect your credit rating, it’s not a permanent situation. In many cases, careful financial planning can help you recover in just a few short years. Some people even raise their credit score to 700 within just two years. How fast you recover will depend on how you manage your finances, following the bankruptcy.
In typical cases, it takes four months to complete a bankruptcy filing, but, before you contact a chapter 7 lawyer Orlando FL, you should be aware that there are certain conditions you must be able to meet. If you fail to meet these requirements, you won’t be able to file a bankruptcy and you’ll just be wasting your attorney’s time.
1. Your income must not exceed the median income for the size of your household in Florida.
2. In cases where your income does exceed that value, you must be able to show that fixed expenses, like mortgage or rent payments, child support, and health insurance premiums, leave you with less than $167 per month. This excludes what you would pay out in credit card payments and similar debts.
3. A bankruptcy may also be permitted, where your debts are related to poor investment choices or a business venture that has failed.
If you qualify for a bankruptcy under these conditions, your best action is to contact an experienced bankruptcy attorney. A legal advocate familiar with Florida’s bankruptcy laws can help ensure you follow the stipulations that will lead to a successful filing.