Considering Bankruptcy When Faced with Overwhelming Debt

With job loss, reductions in work hours and other pitfalls associated with the Great Recession, many Americans find themselves saddled with debt with no clear way out. If you are struggling with debt, what do you need to know?

The stigma of bankruptcy has eased in recent years. Corporations and consumers alike have made use of the fresh start offered by filing bankruptcy in Florida.

Our firm works with clients who need advice about what to do or not do in order to regain their financial stability. Consider the following points:

• Bankruptcy is a good option for those saddled with credit card, medical bills and other fluid debts. Certain debts, including student loans, taxes and child support, are generally not dischargeable. Knowing your type of debt, and how it occurred, is important to making a move toward, or away, from bankruptcy.
• If it appears credit card or other debt was incurred with the intent or possibility of a bankruptcy action, the debt might not be discharged and you could be charged with fraud.
• Be honest when disclosing assets or income during bankruptcy. Giving away assets or signing over property to a friend or relative prior to bankruptcy could also be considered fraud.
• Types of bankruptcy available to individuals include Chapter 7 and Chapter 13 bankruptcy.
• Changes to bankruptcy laws in recent years make qualifying for Chapter 7 bankruptcy more difficult. Chapter 7 allows a debtor to liquidate assets to discharge debt. Many debtors must now use Chapter 13 bankruptcy, which requires you to pay certain amounts on your debt over a three- to five-year period.

Bankruptcy should not be considered lightly, but if you are overwhelmed with debt, it is an important option. When you need answers to tough financial questions, talk to a bankruptcy attorney in Jacksonville.

Florida bankruptcy lawyer Shane Herbert also contributed to this blog post.