' Bankruptcy Scenarios - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Three Common Bankruptcy Scenarios and How They are Handled

There is a variety of issues that cause financial struggles, but in many cases, people who are considering bankruptcy fall into one of three bankruptcy scenarios. They over-extended and used credit to pay for things they could not afford otherwise; they were hit with an unexpected medical bill; or their circumstances resulted in their falling behind on mortgage payments and they can no longer afford to pay for their home.

If bankruptcy seems like the best option and one or more of these three scenarios sounds familiar, here’s what you should know in each case:

Medical Bills

The first of the bankruptcy scenarios is medical bills. If you are driven into debt because of medical bills or medical bills are one of several debts that triggered the need to file, you are not alone. Luckily, bankruptcy can have a profound effect on your ability to deal with medical debt. Filing for bankruptcy creates an automatic stay, which means debt collection efforts temporarily stop and creditors are not permitted to contact you.

Going forward, medical debt will be handled differently depending on whether you file for Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, all of your debts, including medical debt, is dismissed. Your assets might be sold and the money put toward payment of your debt, which is one of the reasons it is so important to work with a bankruptcy attorney. Regardless what you owe, you will no longer have debt once Chapter 7 is complete.

In Chapter 13 bankruptcy, you are given a payment plan that includes your medical bills. In some cases, the debt is reduced, consolidated, or eliminated completely depending on how much can be paid off by the end of the repayment plan.

Home

Several years ago the housing market was booming and many people were approved for mortgage loans worth more than they could afford. In other cases, they were able to afford their mortgage at the time of purchase, but life circumstances changed and their monthly payments are now too much to bear. Regardless how you ended up in financial trouble because of your home, bankruptcy can help you recover and avoid foreclosure.

The equity you have built in your home over the years determines whether you will face foreclosure in a Chapter 7 bankruptcy. Many people file for Chapter 13 when they own a home because it is the best way to keep them in their home and get them back on track with their mortgage. Some states even have laws that exempt homes from bankruptcy.

It is always important to consult an attorney before filing for bankruptcy, but it is especially necessary if you are filing as a homeowner and you want to keep ownership of your home.

Credit Cards

The last of the bankruptcy scenarios is credit card debt. Credit card debt is a problem for many Americans and one of the most common reasons people end up in bankruptcy. Credit card companies tend to be very generous when extending credit, but are often the most difficult to deal with once you fall behind on payments.

Filing for Chapter 7 bankruptcy usually results in the elimination of credit card debt. It is considered unsecure debt and is often considered a non-priority claim. Many people opt to file for bankruptcy for the sole purpose of wiping out what they owe credit card companies.

In Chapter 13 bankruptcy, credit card debt is treated like most other debts. The credit card company is able to collect its debt as part of your repayment plan, though the final amount might not be the total that you owe when your bankruptcy began.

Are your financial struggles so out of control you are considering bankruptcy? Are you tired of the harassment and stress of dealing with debt collectors? We can help. Contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your financial situation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

How to Get Out of Debt: Exploring Your Options

Debt is a pervasive issue that affects millions of people worldwide. It is hard to escape debt, especially if you...
Read More

How Will Bankruptcy Affect My Child Support Obligations?

Parenting can be tough, and it's even harder when you're facing financial difficulties. Struggling with debt and bankruptcy can cause...
Read More

Student Loans: Is Discharge in Bankruptcy Possible?

Student loans have become a necessary evil for most students to pursue higher education. The cost of education has increased...
Read More

Should I File Bankruptcy for Credit Card Debt?

Credit card debt can be a huge burden on our financial lives. The pressure to make payments, maintain balances, and...
Read More

Can Bankruptcy Stop Wage Garnishment?

Wage garnishment is a legal process in which a creditor can collect a debt by receiving a court order that...
Read More

Bankruptcy Guide: How It Works, Types, and Consequences

Dealing with money problems can be a stressful and overwhelming experience. Sometimes, debt can become unmanageable, and it may feel...
Read More

What to Say to Someone Going through Financial Problems

Financial problems can be one of the most stressful experiences a person can go through. If you know someone who...
Read More

How Do People Get Into Debt?

How do people get into debt? Are you struggling with debt? Do you feel like the weight of your financial...
Read More

Don’t Fret About Debt

Debt can be a huge source of anxiety and stress for anyone. Whether caused by an unexpected medical expense or...
Read More

2023 Bankruptcy News

Bankruptcy is a concern for many people. For some, debt is a grim reality that affects all aspects of their...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions