It may be hard to believe, but if you feel overwhelmed by debt, you don’t have to lose everything by filing bankruptcy. In fact, in most cases, homeowners will not lose their property in bankruptcy.
In Florida, you can keep 100% ownership of your house (with certain restrictions on size) and get a $1,000 exemption for your vehicle and $1,000 exemption for personal property in a Chapter 7 bankruptcy as long as you are current on your payments and can continue to make payments on these.
Chapter 13 bankruptcy
Filing Chapter 13 bankruptcy is another way to keep your home or vehicle. With a Chapter 13 bankruptcy, you establish a payment plan for paying off debt within three to five years. With Chapter 13, you can prevent foreclosure on your home, catch up on missed car payments and pay back taxes.
Chapter 13 bankruptcy also only remains on a credit report for seven years, instead of the 10 years required for Chapter 7. Finally, those who are in debt may be able to lower their debt payments through a Chapter 13 bankruptcy.
Several different types of debt are non-dischargable through bankruptcy in Florida. These include the following:
- Overdue child support or alimony
- Debts for personal injury or death caused by driving while intoxicated
- Student loans (unless you can prove you would face hardship to repay them)
- Law violation fines and penalties (e.g., traffic tickets or criminal restitution)
- Tax debts
- Debts not included in bankruptcy papers
The bankruptcy process is complex. If you don’t fill out the paperwork correctly, you still could be liable for certain debts. Consult an experienced bankruptcy attorney about what bankruptcy options might be best for you and how you can best eliminate your debt and move toward a brighter future.