This time of year it is not uncommon for individuals throughout the nation, including the state of Florida, to spend a lot of money on holiday related gifts and celebrations. Generally this period extends from Thanksgiving to the first of the year. In some cases, people plan ahead for this expensive time of year by saving and creating a budget. Other times however the expenses unexpectedly grow causing people to turn to credit cards.
One family economist provides several tips on how to avoid deep debt following the holidays. First she suggests sticking with either debit cards or cash to pay for the gifts and associated items purchased for various celebrations. Those who do use credit cards to cover these expenses should make sure that when the statement with those charges arrives, they can pay the bill off right away. In addition, no more than two cards should be used and in most cases, because of the high interest rates generally tied to cards issued by retailers, they should be avoided.
After the holiday season is over there are inevitably some people who will decide that they are too overwhelmed with debt to find a way out of it. In these instances financial relief may be sought via a consumer bankruptcy filing. The chapter under which a consumer will file varies depending on each individual’s circumstances. That determination is generally made via a means test.
The chapters most commonly filed under by consumers are Chapter 7 and Chapter 13. In addition to resulting in a better financial situation, filers see benefits along the way as well such as an end to creditor harassment and repossession actions. Filing for bankruptcy can also put a stop to foreclosure actions. As individuals facing any of these situations are probably aware, these matters are often stressful to deal with.
Of course the spending done over the course of one holiday season alone is usually not enough to warrant a bankruptcy filing. It may however be the final straw. Individuals who have reached this point may be unsure of what steps to take. In most cases consulting with a bankruptcy lawyer is a good place to start.
Source: The News-Star, “Shop wisely: Avoid post-holiday credit hangover”, Greg Hilburn, Dec. 8, 2013
When a Florida business finds that it is facing great debt, it has several options regarding how to proceed. One of those options is to file for bankruptcy under Chapter 11. Often referred to as “reorganization,” under this type of bankruptcy the petitioner can create a debt restructuring plan to deal with its debt. That plan usually contains specifics regarding how debts will be repaid and may even eliminate certain types of debt. To work, the plan must be approved by the business’s creditors as well as the court.
Recently a Florida company sought debt relief under this chapter. As is the case in most bankruptcies, filings are the result of a variety of factors. In this situation, the power distribution panel and connectors manufacturer indicated that its debt is due to poor business during the recession and litigation involving the previous owners of the business.
Though the company reported an income of $12.3 million in 2013, it claims that its debt is greater than that. It owes a total of $13.74 million to three creditors.
While there are other bankruptcy chapters a business might decide to file under, there are reasons why Chapter 11 might be the most appealing. One of those reasons could be that under this chapter the business continues to operate while going through the bankruptcy process.
When it is a business that files for Chapter 11 bankruptcy, the benefits experienced could extend beyond that entity. The Chapter 11 bankruptcy this Florida business filed could be advantageous to the community it is based in as well, since area residents who work there will continue to be employed during the process. This keeps those individuals from experiencing financial difficulties themselves and contributes to a healthy economy.
As is the case anytime an individual or entity considers filing for bankruptcy to address financial difficulties, the best place to start is with a bankruptcy attorney. That individual should be able to assess the situation and based on the goals of the potential filer, determine the best way to proceed.
Source: South Florida Business Journal, “Davie electronics company files for Chapter 11”, Paul Brinkmann, Feb. 14, 2014
There are many myths that exist regarding consumer bankruptcy. Unfortunately this means that some residents of Florida who are struggling financially may resist filing for Chapter 7 or Chapter 13 bankruptcy. In this post we will look at several of those myths and truth behind them.
The first myth is that when one files for bankruptcy, they will lose large assets such as their house. As we discussed in the last post, the reality is that in many cases, filing for bankruptcy is the best way to hold on to an asset like one’s house. The automatic stay that is issued upon the filing stays all pending foreclosure actions and other efforts to repossess assets. This may provide an opportunity to work out a plan to keep those items.
While the loss of a job may be a reason someone is suffering financial difficulty, another myth that may be keeping some residents of Florida from filing for consumer bankruptcy is that filing could lead to the loss of their job. When one considers how important an income likely is for someone facing financial difficulty, it is easy to see how this myth could strike fear in a person. Potential filers should be assured that filers are actually protected by bankruptcy laws from losing their jobs for that specific reason.
Perhaps the most commonly focused on misstatement of fact is that anyone who files for bankruptcy will have a black mark on their financial record for the rest of their lives. While a bankruptcy remains on the record of a filer for 10 years and that person’s credit score will take a hit for years after filing for bankruptcy, good credit can be rebuilt by making good choices. These good choices include opening credit accounts, regularly charging small amounts and then paying off the balance in full. In addition, any debts that were not discharged during the course of the bankruptcy need to be paid regularly. When people who have been through the bankruptcy process follow a course of action such as this one, at some point they will likely be able to secure financing for more expensive items, such as cars and houses.
There is no question that filing for bankruptcy is a serious decision for an individual to make. Accordingly, it is important that one has all the facts surrounding the undertaking and what to expect at the end of the process. While some may think that they can navigate the bankruptcy system on their own, the best way to complete the process is usually by working with a bankruptcy attorney.
Source: Investor Guide, “Debunking Four Myths of Bankruptcy,” Jon Clarke, April 3, 2014
Residents of the state of Florida are likely well aware of the role the state has played in the nation’s foreclosure crisis. As the real estate market has improved throughout the country, the state of Florida has seen improvement as well. This is illustrated, at least in part, by the reduction in foreclosures the state is experiencing. Over the course of the last two years, the number of active foreclosures that have occurred in the state has dramatically fallen from 550,000 to 277,000.
Despite the decrease in the number of foreclosures occurring in the state of Florida, the number is still significant. It is high enough that Florida ranks first in the nation when it comes to foreclosures. According to CoreLogic, the number of foreclosures that were completed in the 12 month period ending in January 2014 was twice as many as the next highest state.
It is fair to say that few residents of the state of Florida want to lose their homes to foreclosure. In most cases this situation arises as a result of financial distress the owner is experiencing. Those who are facing this situation may not realize that they may have options that could enable them to keep their homes. One of those options is to file for bankruptcy.
A bankruptcy filing immediately applies an automatic stay to any pending foreclosure actions. While the filing places a hold on that proceeding, the bankruptcy itself can provide a more long-term solution for keeping one’s home. For example, as a part of a Chapter 13 proceeding, the amount owed on a mortgage could be incorporated into a repayment plan. In this situation, at the close of the three to five year repayment period, in addition to being back on track financially, a filer could still have his or her home. It is likely that there are multiple residents of Florida who would be pleased with this outcome.
Whether keeping one’s home is a possibility depends on a person’s specific circumstances. Because bankruptcy laws can be confusing and the average person filing for bankruptcy under Chapter 13 does not understand how to craft a repayment plan, most find it beneficial to work with a lawyer who handles such matters.
Source: Herald-Tribune, “Florida staying atop foreclosure ranking,” John Hielscher, Feb. 27, 2014