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Bankruptcy Q & A


If debt collectors have been banging on your door and calling relentlessly, you may be in serious trouble with creditors.  You’ve heard of bankruptcy, but don’t know much about it, and certainly never envisioned it as a step you’d be contemplating!  But here you are. Maybe a short Q & A session will provide you with the guidance you need to move forward.

Q: What is bankruptcy?

A:  Bankruptcy is a process available to debtors who are unable to repay money owed.  There are several types most often used:

  • Chapter 11, 12, and 13 have part of the debt forgiven, and restructure payments in order to repay the rest.
  • Chapter 7 involves work with a trustee to whom assets are forfeited, with all debt being forgiven.

Q: Which chapter is best in my circumstances?

A:  Here’s where it’s useful to have an experienced local attorney advising you.  In general, if you have a steady income and can make some payment, you may be better off with Chapter 11,12, or 13.  For individuals who cannot scrape together any payment and who are agreeable to parting with their assets, Chapter 7 may be best.

Q: Will I have to turn over all assets?

A:  Not necessarily.  While there are rules related to the amount of time you’ve lived in Florida and lots of technical issues, it may be possible to take advantage of exemptions for real property like your home equity, pensions, education and health savings accounts, medical equipment and so forth. You are allowed a certain dollar amount toward your vehicle, essential clothing and home furnishings. Non-exempt assets generally include second homes and vehicles, investments, stocks, cash, collections, and even family heirlooms of value. Every situation is different and yours will be unique to you.

Q: How long will the whole thing last?

A:  For a Chapter 7, the discharge usually takes up to five months, although the case may not officially close for a full year.  When the loans are restructured in Chapter 11,12 and 13, it will last a minimum of three years, and as long as five.

Q:  How will bankruptcy impact my credit?

A:  You’ll be dinged, for sure, and the fact that you filed for bankruptcy will be on your record for 10 years.  On the other hand, you’ll no longer have to sweat about not being able to make payments (which also hurts your credit rating), and you’ll be able to immediately rebuild your rating by making responsible purchases and payments.

Q: Aren’t people who file for bankruptcy losers?

A:  No!  Most people who find themselves considering bankruptcy have suffered medical calamities, lost jobs, or otherwise had to deal with issues outside their control.  They need a fresh start. Period.

Q:  Where do I go for help?

A:  At the Law Office of Julia Kefalinos, our knowledgeable Miami bankruptcy attorneys are focused on achieving the best possible outcomes for our clients.  If you are in serious financial trouble, we can help.  Schedule a confidential consultation in our office today.



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