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 categories. 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

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

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 File for Bankruptcy without Losing Your Assets: How an Attorney Helps You Use Florida Bankruptcy Exemptions

If you're considering filing for bankruptcy, it's important to know that you can still keep your most important assets. The...
Read More

6 Things You Can Do to Make Filing for Bankruptcy Easier

Bankruptcy is often a confusing and scary process. It can be very overwhelming to face the prospect of declaring bankruptcy,...
Read More

4 Great Bankruptcy Resources for People Struggling Financially

Filing for bankruptcy can be a daunting process, but there are many bankruptcy resources available to help you through it....
Read More

6 More Things You Should Know About Bankruptcy

When you’re considering bankruptcy, it can help to know what to expect. Understanding the bankruptcy tricks and tips available to...
Read More

How to Take Control of Your Financial Situation

Do you want to learn how to take control of your financial situation? Does it feel as if your spending...
Read More

What Can I Do If I’m Being Harassed by Creditors?

Struggling with financial problems is bad enough. It gets a lot worse if you’re being harassed by creditors. What is...
Read More

Can I File for Bankruptcy without an Attorney?

The short answer to this question is yes, you can file for bankruptcy without the help of an attorney. However,...
Read More

Can Bankruptcy Improve the Health of Your Marriage?

Marriage and money problems go hand in hand. Financial problems cause everything from minor squabbles to full-blown marriage-ending fights within...
Read More

5 Common Budgeting Mistakes Newlyweds Make and How to Avoid Them

Budgeting mistakes are common, especially when you’re young. Not all newlyweds are young adults, but many first-time marriages do involve...
Read More

When Should Married Couples File for Bankruptcy Together?

There's no easy answer to the question of timing when it comes to bankruptcy. In some cases, it may make...
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

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

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