Filing for bankruptcy is a difficult decision that should not be taken lightly. If you’re considering bankruptcy in Florida, it’s important to understand the potential benefits and drawbacks before making a decision.
In this article, we’ll explore the pros and cons of filing bankruptcy in Florida, so you can make an informed decision about whether bankruptcy is right for you.
Pros of Filing Bankruptcy in Florida:
- Stop collection efforts: Filing for bankruptcy immediately stops collection efforts by creditors. This means they can no longer contact you, garnish your wages, or pursue legal action against you for unpaid debts.
- Stop garnishments: Bankrutpcy will immediately stop wage garnishments and bank garnishments. The creditor might even have to give money back if it took funds shortly before the bankruptcy was filed.
- Discharge eligible debts: Bankruptcy allows you to discharge certain types of debts, such as credit card debt and medical bills. This can provide a fresh financial start and relieve you from overwhelming debt.
- Protect exempt assets: Florida has generous exemptions that can protect your home, car, and other assets from liquidation in bankruptcy. This means you may be able to keep your most valuable assets while still getting relief from your debts.
- Stop foreclosure proceedings: If you’re behind on your mortgage payments, filing for bankruptcy can stop foreclosure proceedings and give you time to catch up on missed payments.
- Improved credit score: While bankruptcy can have a negative impact on your credit score in the short term, it can also be an opportunity to start rebuilding your credit. By paying your bills on time and practicing responsible financial habits, you can improve your credit score over time.
Cons of Filing Bankruptcy in Florida:
- Negative impact on credit score: Bankruptcy will remain on your credit report for up to ten years, and can have a negative impact on your credit score in the short term. This can make it difficult to get approved for loans, credit cards, and other financial products.
- Loss of non-exempt assets: While Florida’s exemptions are generous, some assets may not be protected. This means you could lose certain assets, such as a second home or expensive jewelry, in the bankruptcy process.
- Public record: Bankruptcy is a matter of public record, which means anyone can access information about your case. This could potentially impact your job prospects or personal relationships.
- Cost of filing: Filing for bankruptcy can be expensive, as you’ll need to pay filing fees and attorney fees. If you’re already struggling with debt, this may be a financial burden.
- Emotional impact: Bankruptcy can be emotionally challenging, as it can feel like a failure and may impact your self-esteem. It’s important to seek support from friends, family, or a mental health professional during this time.
Final Thoughts:
Filing for bankruptcy in Florida can provide relief from overwhelming debt and protect your assets, but it also comes with potential drawbacks such as a negative impact on your credit score and loss of non-exempt assets. Ultimately, the decision to file for bankruptcy should be made with the guidance of an experienced bankruptcy attorney and after careful consideration of all options.
If you’re struggling with debt and considering bankruptcy, it’s important to seek out the advice of a professional who can help you navigate the process and make the best decision for your financial future.
Please feel free to reach out for a free consultation by emailing info@tejeslaw.com, calling (407) 734-5166 or using this link to schedule an appointment yourself.
Sources:
- “Exemptions in Florida.” Nolo, https://www.nolo.com/legal-encyclopedia/florida-bankruptcy-homestead-exemption.html.
- “Florida Bankruptcy Exemptions 2023: Estimate Risk of Losing Belongings.” Ascend, https://tryascend.com/bankruptcy/florida/exemptions.
