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Orlando Bankruptcy And Estate Planning Blog

Why consider Chapter 13 bankruptcy instead of Chapter 7?

Bankruptcy is usually discussed as if there is only a single option: Chapter 7 liquidation. If you've ever seen someone go through Chapter 7, you might be put off by the idea of needing it yourself. You don't always lose a lot in this form of bankruptcy, but there is a potential that you will have to give up some of your assets.

A better option for some individuals is Chapter 13 bankruptcy. In comparison, Chapter 13 is better for those who earn a decent paycheck but who are struggling with debt. It's also good for those who earn too much to qualify for Chapter 7 bankruptcy.

Why should I consider creating a pre-need guardian nomination?

Many people become less cognizant as they age. Although it is difficult to think about, mental incompetence could happen to anyone, including you. Mental incompetence could make it difficult for you to care for yourself, manage your finances and make decisions about your health care. Once legally incompetent, you will also be unable to sign legal documents.

Because age so often affects people’s abilities to care for themselves, there are several estate planning documents that can appoint someone to help, such as a durable power of attorney or a health care power of attorney. However, there are some circumstances when a court may decide that guardianship may be the most appropriate way to make sure your needs are met. To be prepared for this possibility, it can be helpful to have a pre-need guardian nomination already filed with the court.

Getting out of debt the right way: Business bankruptcy

Businesses sometimes struggle with money due to a variety of issues, such as the economy stumbling or having a hiccup with third-party vendors. Whatever the reason is, if a business gets too far behind on payments or isn't bringing in enough profits, it may need to turn to bankruptcy.

If you wish to keep your business open, a Chapter 11 bankruptcy can be a good option. It allows for the restructuring of your business so that you can make strides toward profits in the future with a new business plan and a better business structure.

What's the timeline for Chapter 7 bankruptcy?

Bankruptcy is sometimes the right choice, especially when a person's income has no chance of catching up to their debts. Bankruptcy can help eliminate debt and get you back on your feet. In fact, it is relatively quick and painless once you start the process.

In a Chapter 7 bankruptcy, you'll be liquidating some of your assets (unless they fall under exemptions) and using those funds to pay back creditors. Once you do that, the court reviews the case and discharges the remaining debts.

Create your will and make sure your wishes are known

Did you know that approximately 55 percent of people in America die without an estate plan or will? If you can help it, you could do all you can to make sure you don't fall into that statistic.

As someone who has children, a family and assets, it is your responsibility to make sure you and they are taken care of. It's possible to set up an estate plan that does just that.

Have you appointed someone to manage your finances if you cannot?

Many people believe that they can avoid appointing others as substitute decision makers until they can no longer make decisions on their own. However, this belief is a common misconception. Like most legal documents, you must be of sound mind when a durable financial power of attorney is created.

If you wait too long, you may lose the ability to choose your own alternate decision maker, called an agent, with a durable power of attorney. Instead, your loved ones may be forced to seek guardianship, which can be an expensive and time-consuming process for them and a more restrictive option for you. Additionally, bills and other financial tasks can pile up during this time, which could lead to even bigger problems. To prevent this, consider drafting a durable power of attorney before you need it, so you will have an agent ready to step up as soon as he or she is needed.

Payless ShoeSource to close all U.S. stores

Bankruptcy can affect even businesses that seem as if they're doing well. Take, for example, the well-known shoe store chain, Payless ShoeSource. This store has been around since the 1950s, but after filing for bankruptcy the second time, it has decided to close its doors for good.

In 2017, the company closed 673 stores with its first bankruptcy. It was hoped that this would help the company stay afloat, but with competitors such as Zappos, Walmart, Target and Kohls, the store found itself irrelevant. The company also found itself in a high amount of debt due to expanding too quickly, which ultimately led to the company having to close its doors.

Do you have to give up assets in a Chapter 7 bankruptcy?

Chapter 7 bankruptcy, also called liquidation bankruptcy, is a kind of bankruptcy that allows you to get out of debt by eliminating your debts through legal action. To do this, you must be willing to give up certain items that are not exempt from liquidation. They are then sold, and the proceeds are used to repay creditors. Once the proceeds are used up, the remaining debts are forgiven.

There are several benefits to Chapter 7 bankruptcy. These include:

  • Being able to eliminate all unsecured debts (alimony, tax debts and student loans are not usually dismissed)
  • Having no repayment plan
  • Completing bankruptcy in around 3 months

Millions are behind on their car payments. Are you?

As of January 2019, more than 7 million borrowers are 90 days or more behind on their car loans, according to the New York Federal Reserve. That’s 1 million more than the previous high in 2010 when the U.S. was in the Great Recession. The Fed also noted a $584 billion jump in total auto loan debt, the highest number in the 20 years the Fed has been keeping this data.

The source of the increases: More sub-prime auto loans offered by auto finance companies to less-qualified borrowers. While the number of auto loans has jumped, it also means there are more borrowers at high risk of delinquency, according to the report.

Are you exempt from federal estate taxes in 2019?

With the new year, there is no better time to look over your estate plan. Each year, it's a smart move to do this, since new laws, especially tax laws, could impact your estate.

In 2019, the federal exemption for an estate is $11.4 million per person, which is up from the previous $11.18 million in 2018. This is also a dramatic increase from 2017 when the maximum exemption was only $5.49 million per person. Now, if you have assets in the amount of $11.4 million or less, you won't have to pay federal estate taxes.

ABA Defending Liberty Pursuing Justice American Bankruptcy Institute The Florida Bar 1950 CFAWL Criminal Florida Association For Women Lawyers Orange County Bar Association
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