West Palm Beach Personal Bankruptcy Attorney
Chapter 7 or Chapter 13—Which is right for you?
We are experienced and well-regarded personal bankruptcy attorneys in south Florida, and we are clear with clients on this point: Chapters 7 and 13 are two distinct yet effective approaches to managing debt.
As Chapter 13 bankruptcy attorneys, our firm counsels clients who are able to repay a percentage of debts over a period of time, typically three to five years. One of our qualified West Palm Beach bankruptcy attorneys, for example, will recommend client use of this reorganization tool to:
- Stop a foreclosure
- Catch up on mortgage and tax debts
- Renegotiate terms on consumer debts and car loans
Given the depressed housing and jobs market, this is an important and powerful tool.
A Chapter 7 bankruptcy proceeding differs by acknowledging an inability to cover existing debts in the future. Throughout Florida—including West Palm Beach, Vero Beach, Boynton Beach, and Jupiter—Chapter 7 bankruptcy attorneys use this law most frequently. It is a path to freedom from debts and associated anxiety while allowing clients to retain exempt personal property (exemptions include a primary residence, personal belongings, motor vehicles, and retirement savings).
Because of the differences and nuances of these chapters, your selection of a south Florida consumer bankruptcy attorney is a critical decision. In both Chapter 7 and Chapter 13 proceedings, creditors may object to certain exemptions or terms—placing responsibility to make a compelling argument on the consumer bankruptcy attorney. In West Palm Beach, Miami, St. Petersburg, Pensacola, and Jacksonville, bankruptcy law allows for negotiated settlements.
By the same token, a personal bankruptcy attorney needs to be honest with what can and cannot be cleared through either a Chapter 7 or Chapter 13 filing. The following are not eligible for debt discharge:
- Alimony or spousal support payments
- Child support
- Student loans
- Tax debts
Personal Bankruptcy In Florida
The economic conditions of recent years have led to an unprecedented home foreclosure crisis. Coupled with a deep recession, individuals and families in West Palm Beach and surrounding cities have endured some of the worst effects.
Our West Palm Beach personal bankruptcy attorneys and support staff at Kelley, Fulton & Kaplan have clients’ best interests in mind. We work on your behalf to wrest control of your circumstances: manage what debts and expenses you can, dispense debts that cannot be repaid, cease foreclosure proceedings and, where applicable, set up a payment plan that will ultimately pay off certain debts.
In contrast to the common and unfavorable image of “bankruptcy,” Chapter 7 and Chapter 13 filings are often the most responsible action a client can take.
Keep Your Home During Bankruptcy
Are you thinking about filing for a personal bankruptcy but have concerns about whether you will be able to keep your home? Whether you’re filing for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, Florida law typically allows most homeowners to retain their homes through a specific homestead exemption.
A homestead exemption allows debtors who file for bankruptcy to exempt some (or all) of the equity in their homes from bankruptcy proceedings. In a Chapter 7 bankruptcy, the homestead exemption permits you to exempt the equity in your home from liquidation. And differently, in a Chapter 13 bankruptcy, the homestead exemption helps to determine how much money you will pay to your creditors in your repayment plan. A federal homestead exemption exists, but many states, including Florida, require debtors to use state exemptions when they file for bankruptcy. As a result, if you decide to file for a consumer bankruptcy in Florida, you will need to use the Florida homestead exemption.
If you’re considering filing for bankruptcy, it’s very important to have an experienced Florida bankruptcy lawyer on your side who can help you through this complicated process. At the law firm of Kelley, Fulton & Kaplan, our bankruptcy attorneys have been assisting clients in South Florida for years, and we can take a look at your case today.
Florida Homestead Exemption
Florida has one of the more generous homestead exemptions in our country, and as a result more Florida residents who file for personal bankruptcy are able to keep their homes. In order to understand how the homestead exemption works in our state, it’s a good idea to look at the laws that govern it.
The Article X § 4 of Florida Constitution provides the homestead exemption, and Chapter 222 of the Florida Statutes allow debtors to file for a homestead exemption. Under this exemption, homes typically are exempt from bankruptcy proceedings with certain stipulations:
- Acreage: If located within a municipality, the homestead must not be more than ½ acre, and if located outside a municipality, the homestead must not be more than 160 acres
- Residency: In order to qualify for the homestead exemption, you must meet the Florida residency requirements.
- Home ownership: In order to qualify for the homestead exemption, you must have owned your home for a certain number of days as stipulated by Florida law.
Generally speaking, the homestead exemption is “applied liberally in favor of the homeowner,” according to the Florida Bar Journal. It’s important to keep in mind, however, that the homestead exemption only applies to a house in which the debtor resides. In other words, the homestead exemption cannot apply to additional properties, such as a rental property or a vacation house.
Life After Bankruptcy
No doubt your life after bankruptcy will be different, and in many ways the difference will be positive. If you filed for Chapter 7 bankruptcy, most—if not all—of your unsecured debt, such as credit card debt and medical bills, will be gone, and if you filed for Chapter 13 bankruptcy, you’ll have a manageable repayment plan covering all your debts, and perhaps you stopped foreclosure on your home or repossession of your car. In either case, there won’t be any more harassing phone calls from creditors and debt collectors. You can breathe again, out from under the weight of all that financial pressure. But what about the logistics of life after bankruptcy? How will it affect your credit? Will you ever be able to get a loan again? Will it affect your ability to get a job? Here’s more on life after bankruptcy.
Consequences of Bankruptcy on Your Credit
The central principle of bankruptcy is that it gives you a fresh start with your finances. Truly, it is meant to be a second chance, not a punishment. However, bankruptcy does have its consequences. First, bankruptcy affects your credit score and remains on your credit report for seven to 10 years, depending on which chapter you file under. Chapter 7 bankruptcy stays on your credit report for 10 years, and a Chapter 13 bankruptcy is there for seven years. However, if you are thinking about bankruptcy, your credit score and credit report are likely damaged already. Thus, in many cases, your credit report won’t suffer significantly more damage because of bankruptcy, especially if you consistently pay your bills in full and on time after bankruptcy.
You may have heard that a bankruptcy discharge could prevent you from obtaining new lines of credit and may even cause problems when you apply for jobs. This isn’t true in most cases. You can start applying for credit after your discharge date, and, if you apply for the right credit cards, you have a good chance of getting one. Some credit cards are designed specifically for people who have gone through bankruptcy. For example, you can get a secured card, where you put some money down as a deposit, and then use the card every month and pay the entire balance before it’s due. Your credit score and credit report will improve, and soon your bankruptcy discharge will become less of a factor when you apply for credit. Eventually, it will be gone from your credit report forever.
As for your job, bankruptcy won’t affect your current employment in most situations. In fact, it’s illegal for an employer to fire someone or change the conditions of his or her employment because of bankruptcy. If you’re applying for a new job, the employer may request your permission to conduct a credit check. If so, it’s best to let the potential employer know you have a bankruptcy discharge on your credit report and explain how your life after bankruptcy is much better than before. Being open and honest will often outweigh any negative perception of the bankruptcy filing.
Contact a West Palm Beach Bankruptcy Attorney
If you are thinking about filing for bankruptcy, it is extremely important to have qualified legal counsel on your side. Florida bankruptcy law can be very tricky to navigate, but the West Palm Beach bankruptcy attorneys at Kelley, Fulton & Kaplan have substantial experience handling bankruptcies in South Florida. We are dedicated to assisting Florida residents with consumer bankruptcies, and we can answer any questions you have about keeping your home during bankruptcy and the nuances of the Florida homestead exemption. Contact us today to learn more.