Debt is a huge problem for Florida residents; a recent report from Experian suggests that the state holds the second highest growth in credit card debt among everyday consumers. It’s not just credit card debt that plagues Floridians, however; residents also struggle under the burden of auto loans, personal loans, and medical debt. Bankruptcy can not only discharge or restructure these types of debt, but it can also offer relief from debt collection calls, wage garnishment, and even foreclosure. The following are among the top reasons why it is worth considering bankruptcy in Northwest Florida:
1. Get Debt Collectors Off Your Back
Debt collection practices aren’t merely annoying — they’re downright stressful. Constant calls transform your home from a safe haven to a place you dread returning. While the Florida Consumer Collection Practices Act (FCCPA) bars debt collectors from calling you in the middle of the night without permission, many agencies will still go beyond the scope of reason in their effort to secure payment. As soon as you file for bankruptcy, however, an automatic stay occurs, in which all creditors and third parties are prohibited from attempting to collect on your current debt.
2. Put a Stop to Pending Lawsuits
If you’re in the midst of a lawsuit, bankruptcy might allow you to put current legal proceedings on hold. While bankruptcy’s automatic stay doesn’t apply to all cases, it could halt any legal action that involves debt collection.
3. End Wage Garnishment
Many creditors rely on wage garnishment to cover existing debts. Unfortunately, even a small reduction in take-home pay can make it virtually impossible to handle everyday necessities — making it more likely that you’ll take on further debt. Bankruptcy could be your opportunity to break the cycle. During bankruptcy’s automatic stay, most creditors are prohibited from collecting via wage garnishment.
4. Preventing Foreclosures
If the burden of debt makes it difficult to pay your mortgage, you could risk foreclosure. In a time of financial duress, the last thing you need is to lose your home. Bankruptcy could help; chapter 7 bankruptcy may delay the foreclosure by at least a few months, while chapter 13 (also known as the wage earner’s plan) could help you restructure your debt to form manageable monthly payments. While the automatic stay won’t apply forever, it may provide just enough relief to help you escape foreclosure proceedings.
5. Protect Your Retirement Savings
Those unfamiliar with the bankruptcy process typically assume that it results in a total loss of assets. In reality, property needed to work and live can often be protected, as can Employee Retirement Income Security Act (ERISA) qualified pensions or savings. If you’re a long-term Florida resident, you can take advantage of local exemptions that protect:
- 401(k)s
- SEP or SIMPLE IRAs
- IRAs and Roth IRAs
- Retirement benefits for state and county law enforcement, teachers, and public employees
- Firefighter and municipal police pensions
Bankruptcy isn’t an ideal option for every debtor, but it also doesn’t necessarily represent the doom and gloom people expect. Depending on your debt situation, this approach could be key to gaining a fresh start.
Are you considering bankruptcy as an option for resolving your current debt issues in Northwest Florida? Contact Attorney John Greene today to learn more about whether this is a viable approach for your situation — and to discover how he can help. Call 850-424-6833 today or reach out online to schedule a case consultation.
