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Answers to Common Bankruptcy Questions
A decision to file bankruptcy in Orlando should be made only after determining that bankruptcy is the best way to deal with your financial problems. You do this by sitting down during a FREE consultation at our office. We will discuss what bankruptcy is, if you qualify, the pros and cons of filing bankruptcy, what it will do for you, and ALL the options you have even if ultimately it is not bankruptcy.
People who would genuinely benefit from filing bankruptcy in Orlando sometimes don’t take the opportunity because of the misinformation from friends and family that warn them they will lose everything they have and their credit will be ruined forever. The opposite is true. Most people do not lose property in a bankruptcy. And generally within a few months after filing bankruptcy, credit card offers will start arriving again in the mail. And I am speaking from personal knowledge because I have been through bankruptcy myself.
There have been many news reports suggesting that changes to the bankruptcy law passed by Congress in 2005 prevent many individuals from filing bankruptcy. It is true that these changes have made the process more complicated. But the basic right to file bankruptcy and most of the benefits of bankruptcy remain the same for most individuals.
What Is Bankruptcy?
Bankruptcy is a legal proceeding in which a person whom cannot pay his or her bills can get a fresh start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops all your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.
In the United States of America, our founding fathers recognized the importance of bankruptcy. The United States Constitution (Article 1, Section 8, Clause 4) authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States.” The Bankruptcy Code of Laws and Procedures we have today (which was created in 1978), instituted by our federal government, provides relief for overburdened debtors.
Bankruptcy contemplates the “forgiveness” of debt and has its roots in the Bible. Under U.S. law, a debtor may only receive a discharge of debts in a Chapter 7 bankruptcy once every eight (8) years. Under Biblical law, the release of debts came at the end of seven (7) years.
“At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD’s release” (Deuteronomy 15:1-2).
The Bankruptcy Code was created to give debtors a fresh start in life. It is my job to explain what it may do for you.
What Can Bankruptcy Do for Me?
A bankruptcy attorney in Orlando may make it possible for you to:
- Eliminate the legal obligation to pay most or all your debts. This is called a discharge of debts. It is designed to give you a fresh financial start.
- Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not however, automatically eliminate mortgages and other liens on your property without payment.)
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
- Restore or prevent termination of utility service.
- Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you in fact owe.
What Bankruptcy Can Not Do
Bankruptcy cannot, however, cure every financial problem. In bankruptcy, it is usually not possible to:
- Eliminate certain rights of secured creditors. A creditor is secured if it has taken a mortgage or other lien on property as collateral for a loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money on the debt if you decide to give back the property. But generally, as long as you keep paying for your secured property (house, car) you can keep it.
- Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, most student loans, court restitution orders, criminal fines, and most taxes.
- Protect cosigners on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.
- Discharge debts that arise after the bankruptcy has been filed.
What Different Types of Bankruptcy Cases Should I Consider?
There are four types of bankruptcy cases provided under the law:
- Chapter 7 in Orlando is known as straight bankruptcy or liquidation. It requires an individual to give up property which is not exempt under the law, so the property can be sold to pay creditors. Florida has generous exemption laws. Generally, those who file chapter 7 keep all their property except in certain situations which can be explained more in depth during a free consultation.
- Chapter 11, known as reorganization, is used by businesses and a few individuals whose debts are very large.
- Chapter 12 is reserved for family farmers and fishermen.
- Chapter 13 in Orlando is a type of reorganization used by individuals to pay all or a portion of their debts over a period of years using their current income.
Most people filing a personal bankruptcy will want to file under either chapter 7 or chapter 13 in Orlando. Either type of case may be filed individually or by a married couple filing jointly. Remember, you do not have to have file bankruptcy with your husband or wife.
Chapter 7 (Straight Bankruptcy)
In a case under an Orlando chapter 7 bankruptcy, you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for exempt property which the law allows you to keep. In most cases, all your property will be exempt. But property which is not exempt is sold, with the money distributed to creditors.
If you want to keep property like a home or a car, you need to be current or as close to current as possible before filing. We can give you bankruptcy advice in Orlando if you are currently in a loan modification trial period to discuss when you should file Chapter 7 in Orlando.
If your income is above the median family income in your state, you may have to file a chapter 13 case (the median family income for a family of four in Florida in 2011 is approximately $62,742). Contact us so we can discuss what goes in qualifying you for bankruptcy. We can still qualify you for a Chapter 7 regardless of IRS guidelines. Higher-income consumers must fill out means test forms requiring detailed information about their income and expenses. If most of your debt is business related we may be able to bypass the income restriction to filing Chapter 7 bankruptcy in Orlando.
What Does It Cost to File for Bankruptcy?
Court costs are now $335 to file for bankruptcy under chapter 7 and $310 to file for bankruptcy under chapter 13, whether for one person or a married couple. The court may allow you to pay this filing fee in installments if you cannot pay it all at once. If you hire an attorney you will also have to pay the attorney fees you agree to.
Since I filed personally filed bankruptcy, I make certain my fees are lower than most of my competitors. Our firm believes in providing high-quality service at an excellent value. Value is not what usually comes to mind when you think of bankruptcy attorneys in Orlando, Kissimmee, and Sanford. In this economy, however, the cost of a bankruptcy is extremely important and you want to be with the most competent attorney and law firm at the lowest price you can find to help you file a Chapter 7 or 13 bankruptcy in Orlando. Keep in mind though, do not get hung up on finding the lowest rates possible. There are many attorneys that may not have filed one bankruptcy case before they meet with you. Ask them how many filed bankruptcy cases are reported in PACER under their account as this is public record. He or she will immediately know that you are well informed and will most likely tell you the truth. In our office and while you are represented, your eyes will be open through the whole process. This is what we strive to deliver to you and your family.
What Must I Do Before Filing Bankruptcy?
You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed. The Law Offices of Walter F. Benenati, Credit Attorney P.A. will coordinate this class for you. It can be done over the internet or telephone and takes approximately 60 to 90 minutes.
What Property Can I Keep?
In a chapter 7 case, you can keep all property which the law says is exempt from the claims of creditors. Florida has liberal bankruptcy exemptions, including an unlimited homestead exemption.
In determining if property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth when your bankruptcy case is filed. Especially for furniture and cars, this may be a great deal less than what you paid or what it would cost to buy a replacement. Unless you are a high profile public figure, most likely no one will be going to your house to determine the value of your belongings.
You also only need to look at your equity in property. That means you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you have only $10,000 in equity. You can fully protect the $50,000 home with a $10,000 exemption.
While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a chapter 13 case, you can keep all your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you did not file bankruptcy.
What Will Happen to My Home and Car If I File Bankruptcy?
In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to the trustee in a “buyback”. Most trustees will allow you up to 10 months to pay back your non-exempt value.
However, some of your creditors may have a security interest in your home, automobile, or other personal property. This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt. Bankruptcy does not make these security interests go away. If you do not make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case.
In an Orlando chapter 13 bankruptcy case, you may be able to keep certain secured property by paying the creditor the value of the property rather than the full amount owed on the debt. Or you can use chapter 13 to catch up on back payments and get current on the loan.
There are also several ways that you can keep collateral or mortgaged property after you file a chapter 7 bankruptcy in Orlando. You can agree to keep making your payments on the debt until it is paid in full. Or you can pay the creditor the amount that the property you want to keep is worth. In some cases involving fraud or other improper conduct by the creditor, you may be able to challenge the debt. If you put up your household goods as collateral for a loan, (other than a loan to purchase the goods) you can usually keep your property without making any more payments on that debt.
Can I Own Anything After Bankruptcy?
Yes! Many people believe they cannot own anything for a period after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within six months (180 days) after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.
Will Bankruptcy Wipe Out All My Debts?
Yes, with some exceptions. Bankruptcy will not normally wipe out:
- Money owed for child support or alimony
- Most fines and penalties owed to government agencies
- Most taxes and debts incurred to pay taxes which cannot be discharged
- Student loans, unless you can prove to the court that repaying them will be an undue hardship
- Debts not listed on your bankruptcy petition
- Loans you acquired by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan
- Debts resulting from willful and malicious harm
- Debts incurred by driving while intoxicated
- Mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).
Will I Have to Go to Court?
In most bankruptcy cases, you only have to go to a proceeding called the meeting of creditors to meet with the bankruptcy trustee and any creditor who chooses to come. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation. Read about it here.
Occasionally, if complications arise, or if you choose to dispute a debt, you may have to appear at a hearing. In a chapter 13 case, you may also have to appear at a hearing when the judge decides if your plan should be approved. If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney.
What Else Must I Do to Complete My Case?
After your case is filed, you must complete an approved course in personal finances. This course will take approximately two hours to complete. Many of the course providers give you a choice to take the course in-person at a designated location, over the Internet (usually by watching a video), or over the telephone. We will coordinate it for you.
Will Bankruptcy Affect My Credit?
Great question! One of the biggest misconceptions about bankruptcy is that it will ruin your credit forever. That is false. Our emphasis is in credit. Face it. Without a good credit score, it is hard to be approved for anything. Most people come to our office with bad credit to begin with. Bankruptcy may actually IMPROVE your credit because your debt to income ratio will improve since most debts will be wiped out. It is not uncommon to see a jump of 70 to 100 points in your credit score because you filed bankruptcy! If you decide to file bankruptcy, remember that debts discharged in your bankruptcy should be listed on your credit report as having a zero balance, meaning you do not own anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult or costly to get credit. I am currently the only attorney in Orlando that provides a free service (six months after your bankruptcy) in reviewing your credit reports and MAKING SURE they are reporting accurately. Because it’s not just what happens during the bankruptcy, it is what happens after that is just as important.
Why Don’t I Just Hire a Debt Settlement Firm? How about Credit Consolidation?
Over half of the people I meet that come in for a FREE consultation tell me how they were ripped off by a debt settlement company in Orlando. The fact that there are no laws that regulate this industry has caused this predatory field to rule the airwaves of television and radio trying to sell you on their “services” and to avoid bankruptcy. I once even saw a commercial that had former President Obama in their advertisement to fool consumers that he was associated with it. When you realize how the debt settlement business model works, it is usually too late. These predatory companies take their fees upfront which is usually 15 to 25% of your total debt. That is outrageous. It’s so bad that a major debt settlement firm was sued by the Florida Attorney General. You can read about it by clicking here.
After about 6 months into the program after not paying your debts and instead paying their fees, most people call bankruptcy attorneys in Orlando for help when they realize nothing is happening. When you ask for your money back, they tell you their fees are non-refundable and you realize you are out 3 to $4,000. Moreover, many creditors such as Bank of America or Chase do not take debt settlement firms seriously. Most creditors will continue to call and harass you. There are also tax implications to settling debt for less than the full amount (you will receive a 1099 MISC Income at tax time) which is never mentioned to potential debt settlement clients. Remember, these predatory companies want you to think bankruptcy is the worst thing you can do because if you file a Chapter 7 bankruptcy in Orlando, it is game over. No More Debt.
Credit consolidation companies like to mention they are non-profit. Make no mistake about it. Part of your payments every month is a fee charged to you for perhaps 3 to 4 years. Your credit will in most cases improve dramatically faster if you file bankruptcy and wipe away your debt after 4 months in a Chapter 7 bankruptcy in Orlando rather than being stuck in a payment plan for up to 5 years (which states “Managed by Debt Counseling” in your credit report). However, if your debt is below $10,000, a reputable credit consolidation organization may help you obtain lower interest rates. On the other hand, if your debt is unmanageable, credit consolidation companies should be recommending bankruptcy as the best option to resolve your financial situation.
What Else Should I Know?
Utility services: Public utilities, such as the electric company, cannot refuse or cut off service because you have filed for personal bankruptcy. However, the utility can require a deposit for future service and you do have to pay bills which arise after bankruptcy is filed.
Discrimination: An employer or government agency cannot discriminate against you because you have filed for bankruptcy. Government agencies involved in student loan programs also cannot discriminate against you based on a bankruptcy filing.
Driver’s license: If you lost your license solely because you could not pay court-ordered damages caused in an accident, bankruptcy will allow you to get your license back.
Co-signers: If someone has co-signed a loan with you and you file for bankruptcy, the co-signer may have to pay your debt. If you file under chapter 13, you may be able to protect co-signers, depending upon the terms of your chapter 13 plan.
Why Go with The Law Offices of Walter F. Benenati?
As with any area of the law, it is important to carefully select a bankruptcy attorney in Orlando who will respond to your personal situation. The attorney should not be too busy to meet with you individually and to answer questions as necessary. One of our attorneys will personally meet with you during the FREE initial consultation. After hiring our firm, clients are grateful for the attentive caring customer service they receive.
If you call our office you will be greeted with a live person (even after hours) who will make sure your needs are met. Go ahead and try us now. I personally try to respond to all calls from clients the same day. Some clients are shocked but pleasantly surprised when they receive a call at 9:30 p.m. at night from me. These are my clients and I am their attorney. It is my job to provide them the highest level of customer service and that includes returned phone calls the very same day.
The hearing that you are required to attend during the bankruptcy process creates anxiety for many of my clients. ONE OF OUR ATTORNEYS WILL PERSONALLY ATTEND YOUR MEETING WITH CREDITORS. Most attorneys will have a local attorney “cover” your meeting. In fairness, this is not too imply they do not care about your hearing with the Trustee. Attorneys realize that it is a 5 to 10 minute meeting that is usually routine and not a cause for concern.
I think differently because I personally went through it myself. Yes, I filed bankruptcy. And back when I did it, I was anxious and I couldn’t sleep the night before the meeting. At The Law Offices of Walter F. Benenati, we will attend your “341 Meeting with Creditors”. This is a very frightening time for our clients. I know because I have personally been through the bankruptcy process. If my attorney did not personally attend the “341” Meeting of Creditors with the Trustee, I would have been extremely disappointed. He was there in person and that is why WE ATTEND ALL THE CREDITOR MEETINGS with our clients. I have been in your shoes and I can relate to your situation because I have been in your situation. I know what it’s like.
At our firm, we provide an additional service to our clients: We will, upon intake and retainer, accept calls upon your behalf from creditors, collection agencies, and debt collection law firms that are harassing you. This should immediately end the stress and anxiety that many of our clients face on a daily basis. Six months after the closing of your case, we will review your credit reports to determine everything is being reported correctly. (This is a one time service)
Remember, in bankruptcy, as in all areas of life, that the person advertising the cheapest rate is not necessarily the best. You may see ads for document preparation services also known as typing services or paralegal services, involving non-lawyers who offer to prepare bankruptcy forms for a fee. Problems with these services often arise because non-lawyers cannot offer advice on bankruptcy cases and they offer no services once a bankruptcy case has begun. There are also many shady operators in this field, who give bad advice and defraud consumers.
When first meeting a Orlando bankruptcy attorney, you should be prepared to answer the following questions:
- What types of debt are causing you the most trouble?
- What are your significant assets?
- How did your debts arise and are they secured?
- Is any action about to occur to foreclose or repossess property, to attach your wages or bank account, or to shut off utility service?
- What are your goals in filing the case?
Can I File Bankruptcy without an Attorney?
Sure. You can also remove a tooth without a dentist or clean your own septic tank. Although it may be possible for some people to file a bankruptcy case without an attorney, it is not a step to be taken lightly. The process is difficult and you may lose property or other rights if you do not know the law. It takes patience and careful preparation. Chapter 7 (straight bankruptcy) cases have exemption rules and requirements that have to be prepared to benefit your particular set of circumstances. Very few people have been able to successfully file chapter 13 (reorganization) cases on their own. If you decide to obtain more information or advice regarding an Orlando, Kissimmee, or Sanford personal bankruptcy, allow me the opportunity to help you in this difficult time. Thank you for your consideration.
Remember: The law often changes. Each case is different. This is meant to give you general information and not to give you specific legal advice.
CALL US NOW AND WE WILL GUIDE YOU IN MAKING THE BEST DECISION FOR YOU AND YOUR FAMILY IN FILING A CHAPTER 7 BANKRUPTCY IN ORLANDO. (407) BANKRUPT (407-777-7777)
Abogado Hispano con experiencia en juicios sirviendo las necesidades legales de la comunidad de la Florida
Federal Law requires that I provide you with the following notice: “We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”
Don't Just Take Our Word for It
“I was very hesitant to go through the procedure of bankruptcy, especially at this late age of my life of the close to retirement years. Going through difficult personal health and family events made this very hard, yet every person I came in contact at the Law offices of Attorney Walter Benenati made me feel at ease. They were always quick to answer any questions. Even one time I was shocked I emailed the office and not even a couple of minutes later the attorney called to answer my question. My 17 year old son, was next to me and he was “mom did that just happen”? Every step of the way they were with me. They always informed me of any changes etc. So appreciated communication and help from Olga, Maria, Zumary, Stephanie, Jennifer and Chris. I am extremely grateful to Denisse B. & Attorney Claribel Acosta for helping me so at ease with the transitions and process of it all till the end. These girls rock!!! Great communication, Great Service, forever grateful for the blessing of the Benenati Law Office for this Season of my Life. Trust me , Attorney Walter Benenati was the right choice for me and it will be for you too.”
Robert and Joyce W.
“We were very impressed with professionalism no matter who we spoke to when we called the office. We were always treated with respect and kindness. The process was very smooth and there were no surprises. The whole procedure was explained beforehand and the process was exactly as explained. We were very embarrassed at having to file bankruptcy but Mr. Benenati and his staff always made us feel at ease and helped us to maintain our dignity through a very difficult time. We cannot thank them enough for helping us to get a fresh start!”
“I’m not sure if my words alone, could explain every detailed step that was taking by every individual in the Orlando and Kissimmee offices, that helped me with all of my documents. They went above and beyond. Customer services is an understatement. I work with over 65000 people and word of mouth is everything. If you need a lawyer and his staff that will work hard for you, Walter Benenati and his staff should be your # 1 choice.”
“Initially, I was embarrassed about having to file for bankruptcy. Your firm made me feel comfortable about my decision and did not judge me at regarding my past financial decisions. Everything happened just the way it was explained at the consultation. No hidden costs or excessive time away from work. Thank you so much for helping me get my life back on track.”
The Benenati Law Firm is the best. I can’t speak highly enough about their staff. Walter and their team were excellent helping me in my case. They answer all questions, answer the phone immediately every time, and they offer an awesome price. They are very knowledgeable with all laws. I’m amazed how fast my case was handled and done. I will continue to to use the Benenati Law Firm in the future. I would definitely recommend to my family and friends. Thank you Benenati Law Firm for helping me restart my life.
“Amazing Law firm! The best in the business. Don’t delay. Push the Restart Button!”
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