Almost 50% of Florida Families Near Bankruptcy Despite Employment
In the wake of the “Great Recession,” many Florida families still face financial difficulty. A recent report published by the United Way demonstrates how many more hardworking families are at risk of financial failure than you might expect. Although it can be difficult to face, filing for bankruptcy can have a positive long-term effect on your financial situation.
High Percentage of Florida Residents at Risk
The report, conducted by Rutgers University and commissioned by the United Way, examines the “ALICE” demographic, which stands for individuals who are Asset Limited, Income-Constrained, and Employed. The study set out to examine the financial livelihood of everyday people who work hard as hospitality workers, daycare teachers, landscapers, and so on, but whose incomes are insufficient relative to the economy. The report calculated that to cover costs of “basic survival” such as housing, transportation, health care, child care, and food, an individual in Florida must make at least $18,600 annually, while a family of four must have income around $47,500.00 per year.
The report, which is based on data from sources such as the Census Bureau and the Bureau of Labor Statistics, calculated that a surprising 203,000 households in Orange, Osceola, and Seminole counties– nearly half of households in the tri-county area– skirt the federal poverty level, eviction, or even homelessness, and live one missed paycheck away from financial ruin. The cost of basic survival rose by 13% from 2007 to 2012 as the number of at-risk households spread. The report indicated that around a third of ALICE homeowners in each county are “cost-burdened,” which means that more than 35% of their income is taken up by mortgage payments.
Paths to Financial Success
The organization hopes to provide funding for workers to cover living expenses so that they can obtain education for jobs with a greater income. In the meantime, for hardworking Florida residents facing serious financial risk, filing for bankruptcy can be a viable option. The most well-known type of bankruptcy is Chapter 7 bankruptcy, where an individual gives up non-exempt property in exchange for a court wiping away, or “discharging,” their debt. The types of property that are safe from collection are complex, but can include the primary residence, a portion of your wages, and even pensions. However, you must pass a “means test” to qualify.
If you do not qualify for Chapter 7 bankruptcy, you may still qualify for a Chapter 13 bankruptcy, which sets up a payment plan for debt, rather than eliminating it. However, it also provides individuals with a chance to keep property that might be repossessed during a Chapter 7 bankruptcy. Often termed a “wage-earner” bankruptcy, Chapter 13 bankruptcy filings can be tailored to meet your individual capabilities, and may be appropriate for families who fall into the “ALICE” category.
If you or someone you know faces severe financial difficulty, like many Floridians, reach out and seek potential solutions. A local Miami bankruptcy attorney at the Law Office of Julia Kefalinos, Attorney, P.A. can assist you in understanding the bankruptcy process and your options.