Fort Lauderdale Bankruptcy Lawyer Blog

Often people considering bankruptcy think they can "keep that one credit card that is almost paid off" when filing bankruptcy. They think it will help them rebuild credit faster, or they're just in love with their American Express card and just wouldn't dream of leaving home without it!

Unfortunately, you cannot pick and choose which debts to list in your bankruptcy petition. All of your debts, including credit cards and debts you owe to friends and family members (you can always pay friends and family back if you choose) must be listed on your petition.

When you sign a bankruptcy petition, you are certifying under penalty of perjury that all of your assets and debts are listed. During the 341 meeting with the trustee (also known as the "meeting of creditors"), the trustee will also ask you (under oath again) if you have listed all your debts on your petition.

As I have explained to many clients that are hopelessly enamored of a particular card (Macy's comes to mind), it really doesn't do any good to leave it off the petition or not tell your bankruptcy attorney about it. The majority of credit card companies routinely monitor the bankruptcy filings and credit bureaus for changes to your credit standing. If they see a bankruptcy filing, they will automatically close your account whether it's listed or not. Better to wipe the debt out and start all over again since you're probably not going to keep the card anyway.

We are happy to offer a free consultation in our Coral Springs or Davie location to discuss your financial picture and how quickly you can rebuild your credit again after a Chapter 7 or Chapter 13 bankruptcy. Most people have credit card offers in the mail again within a month or two of their case closing. A lot quicker than they ever thought! Find out the truth about bankruptcy today!

Not every bankruptcy case is a "no-asset" case. A Chapter 7 is called a "liquidation" bankruptcy for two reasons: 1) you liquidate all of your debts; and 2) the trustee has the right to liquidate all unprotected assets for the benefit of the creditors.

A no-asset case is one that doesn't have any assets for a trustee to administer. Florida law gives bankruptcy filers $1,000 with which to protect personal assets and $1,000 to protect a motor vehicle (can be a car or motorcycle). If you do not claim homestead exemption (you rent instead of having a mortgage), you also get a wild card exemption of $4,000 to protect property with.

Sometimes clients want to transfer assets right before a bankrutpcy so they don't lose them. Bad idea. Doing so is bankruptcy fraud and it is always better to simply plan for the assets within the bankruptcy case then to do something that could have crinimal consequences.

So what happens with assets in a Chapter 7 bankruptcy case? You have two choices. You can either pay the trustee the value of the asset and keep it or you can turn the asset over to the trustee and he/she will sell it and liquidate the asset for the benefit of the creditors. The trustees in this area will work with you if you need to make payments for a short time (six to eight months is the norm) or they may settle for a lump sum payment that is less than the amount owed.

Even if your case is an asset case, the odds are that you are still wiping out a huge sum of debt for a fraction of what you owe. Ask yourself: If my creditors had gotten together and offered to cancel my debt for $5,000, would I have taken it? There's really no difference here except the payment is being administered by a third party.

The key is to make sure that you understand the details of your particular case and what assets you may have to pay to keep. Then be prepared for it by having family loans lined up, budgeting for the trustee payments or considering a Chapter 13 so you can pay the assets out over 3 to 5 years instead of 6 to 8 months.

You may be surprised to learn that filing bankruptcy may be the fastest way to repair your credit and get back on your feet.

While you owe money to the credit card companies and are not paying, your delinquency is reported to the credit bureau. Every time your credit card debt is sold, it's usually reported again by the debt buyer or the collection agency. All of these entries remain on your credit report for 7 years from the date of entry. Many times, debt collectors will alter a number on the account number (never on purpose, I'm sure) and report the debt again a couple of years later. Every time this happens, it will be on your credit report for 7 additional years. It could take you significantly more than 10 years to clean that up or qualify for a mortgage.

A Chapter 7 bankruptcy remains on your credit report for 10 years from the day of filing. But that doesn't mean that you won't have credit for 10 years or that you have to wait that long to buy a house. You will get credit card offers in the mail within a couple of months after your case closes. Two years after you receive your order of discharge, you also may qualify for FHA loans again.

Don't listen to what others say about bankrutpcy and keep yourself from enjoying the pease of mind that being debt free brings. You probably don't have credit now and really have nothing to lose except the creditor phone calls and harassment. In fact, you will probably recover much quicker.

We offer free consultations where you can get all the facts about how a bankruptcy might be able to help you enjoy life again. Call or email us today!