Bankruptcy 101: The Basics

Bankruptcy 101: The Basics

If you can’t pay your debts, filing for bankruptcy might be the right move to make. In 2022, there were more than 4,400 bankruptcies filed in the Miami United States Bankruptcy Court across all chapters, including Chapter 7, Chapter 11, and Chapter 13 filings.

When your debts, whether they be mortgages, bank loans, credit cards, student loans, or SBA loans, haven taken over your life, filing for bankruptcy is an option you must consider. Bankruptcy can reduce or eliminate your debt depending on your specific.

Continue reading to see how bankruptcy works, whether it can be a good option for you, and how a bankruptcy attorney in Miami can help your case.

Bankruptcy in a Nutshell

Some people think that to file a bankruptcy you must be completely out of money and have no assets or income.  However, the truth is people file bankruptcy every day while they still have money, good incomes, and property such as a house, a car, personal property (household goods and clothing, ect…), a business and/or a 401K or other retirement account.  Bankruptcy allows many individuals and businesses to get financial relief when they are unable to pay their debts as they come a debt. Some relief is total and some relief is partial, depending on the person’s particular circumstances. 

When to File for Bankruptcy

When to File for Bankruptcy

The primary goal of bankruptcy laws is to offer a “fresh start” to individuals or business entities that are unable to pay their debts as they come due.  When credit cards, medical bills, student loans, SBA loans, and unexpected expenses are too much for you to handle and they prevent you from paying your rent, mortgage, car payments or your groceries, that is the time to file for bankruptcy. 

Debts can pile up due to unforeseen circumstances that are not necessarily the debtor’s fault, such as illness, a death in the family, job loss, divorce, or even just the slow grind of inflation on your budget. Whenever a person or a business finds themselves unable to cover their outstanding debts, they need to get information from a bankruptcy attorney in Kendall.

Pre-Bankruptcy Considerations

Before you file for bankruptcy, you will need a comprehensive consultation and understand the options available to you.  At the consultation, all your relevant financial information will be reviewed and considered, and the different avenues of relief will be explained to you.

If your income is less than Florida’s median income and you have no monthly disposable income, you are eligible for Chapter 7 bankruptcy which is the most common bankruptcy people file.  However, even if your income is above the median income, you can still qualify for Chapter 7 relief if you pass the Means Test which is a lengthy formula created by Congress and designed to determine if you have the means to repay some or all of the debts you owe to your creditors.  An experienced bankruptcy attorney in Tamiami can locate all the Means Test deductions available to you so that none are overlooked and to ensure that you can file a Chapter 7 if you qualify and if filing a Chapter 7 is in your best interest.  Not all people who qualify for Chapter 7 should file one.  Often times it is better to file a Chapter 13 to avoid a Chapter 7 Trustee who can take and sell your non-exempt assets or make claims against friends or family members involved in your financial life.

If your income is too high and you don’t qualify for Chapter 7 or if you qualify for Chapter 7, but you need to catch up on your mortgage payments or lower your car payments or retain valuable non-exempt assets or avoid a Chapter 7 Trustee making claims against your friends and family, you can file for Chapter 13 bankruptcy to propose a repayment plan to reorganize your financial life, save your home, your car, and other assets important to you and your family. It’s important to note that filing for Chapter 13 does not mean you must repay all of your debts.  In most Chapter 13 bankruptcies, people repay only a small fraction of the credit cards, medical bills and other unsecured debts that they owe.

Before filing for any type of bankruptcy, you must get good, sound advice from an experienced bankruptcy attorney.  When times are tough, many attorneys who have no bankruptcy experience will advertise themselves as bankruptcy attorneys to try to cash in on the coming wave of of bankruptcies.  Be sure to ask your bankruptcy attorney how many decades they have been representing people in bankruptcy court.

Find an Experienced Miami Bankruptcy Attorney at The Bankruptcy Law Offices of James Schwitalla, P.A.

With over 31 years of experience practicing bankruptcy in South Florida, The Bankruptcy Law Offices of James Schwitalla, P.A., led by James Schwitalla, offers bankruptcy attorney services to help you navigate the legal maze with ease. No matter the reasons for your bankruptcy, our team will help you find the most suitable legal solutions for your case. 

Learn more about us and visit our Miami (Kendall/Tamiami) office soon or send us an online inquiry now!

About Us

Miami Bankruptcy serves clients throughout the Miami and Miami-Dade County area, South Florida and the Florida Keys, including Kendall, Westchester, Sweetwater, Pinecrest, Palmetto Bay, Cutler Bay, Homestead, Florida City, Cutler Ridge, Richmond Heights, Key Largo, Marathon, Islamorada, Big Pine Key, Key West, Tavernier and Plantation.

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