When one has access to credit but is experiencing financial difficulties, it can lead to serious problems. In some cases, one may be able to pay down the accumulated debt over a period of time. Unfortunately, for many people in Florida, the outpouring of creditors calling, legal actions being taken and the unwarranted threats coming from creditors can lead individuals into a psychological spin where they see bankruptcy as their only option.
When one is unable to pay back all of one’s debt, the creditor may file for a court judgment. This is a way for the credit company to attempt to retrieve the money that they are owed. Florida residents may be interested in knowing that they may be able use their “desire” to file bankruptcy as a way to bargain and reach an agreement with their creditors. This will not always be the case, but it is an option for those who are trying to avoid bankruptcy until the end.
If bankruptcy is the only way to get rid of a court judgment or a debt, then it is helpful to understand the difference between Chapter 7 and Chapter 13 bankruptcy. Both can assist with debt judgments. When one files Chapter 7 bankruptcy, eligible debt judgments and most unsecured debts are eliminated and collection activity is halted. Filing Chapter 13 bankruptcy can be helpful in that it allows one to agree to a repayment plan that will eliminate one’s debt over the duration of a few years.
The important thing is that Florida residents understand and weigh their options when it comes to dealing with accumulated debt. One option may be better suited for an individual than another. Bankruptcy can provide instant relief from collection efforts, harassment from creditors and legal actions, such as debt judgments, while bringing along with it the peace of mind one needs to move forward and start working toward a better financial future.
Source: Fox Business, “Debt Judgment May Trigger Bankruptcy”, Fred O. Williams, May 6, 2014