Personal bankruptcy law varies from state to state.
Bankruptcy is often necessary due to a change in circumstances such as job loss or, whenever the debtor is encumbered with exorbitant debt due to cataclysmic illness or divorce.
There are two types of bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 is simply a liquidation (sale) of all applicable property in order that creditors be repaid. Typically a lien has been file, such as in the case of a foreclosed mortgage or vehicle repossession.
Chapter 13 is somewhat different – and may be preferable – if the debtor remains employed and able to make payment currently – in that the homeowner is allowed to remain in the home, agreeing to make monthly payments, which typically have been “reworked” to be more affordable. In the case of credit card debt, for example, a reasonable and appropriate monthly payment is set which will pay down the loan over the next 3 to 5 years. It may be necessary to pay a “small” sum up front, particularly if the debt holder has fallen well behind.
The bad news is that a bankruptcy will remain on your credit report for 10 years.
The good news (and it can be good news) is that you probably had pretty poor credit just before filing so, it more than likely will not get any worse and can get quite a bit better. And, if you are patient, applying for new credit cards perhaps, “secured” through your bank, will help rebuild your credit score.
Nonetheless, you will need to be extremely diligent and self-disciplined with your use and repayment of every one of them. I do not expose this if you have had trouble in the past with credit card abuse!
In the future, you may need to give deposits to utility companies. Still, the law disallows for any discrimination due to personal bankruptcy by employers or government agencies regarding the issue of licensing, etc..
Your spouse will only be affected when the debts you owe are jointly made.
Filing Chapter 7 currently costs $200.00 and can be used again within 6 years of the first filing date.
The complete cost to file Chapter 13 is $185.00 and can be used at any time.
There are a few debts which can not be erased by taking either of these avenues. They are:
1) Child support payments, alimony, fines, some taxes.
2) Any debt that is not listed in the bankruptcy filing.
3) Loans obtained by deliberate falsification of the application forms.
4) Debts resulting from “willful and malicious harm”.
5) Student loans funded by the government. (Except in cases where repayment would be deemed to create “undue hardship”. This is, most often, difficult to prove.)
6) Any unpaid mortgage or lien. However, once sold off by the creditor, the obligation is totally wiped out.
For further information and help in obtaining legal advisement regarding your bankruptcy in Florida, log onto www.Bankruptcyinformation.com/FL_exemp.htm.