CALL FOR A FREE
INITIAL CONSULTATION
813.254.5696

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.

Tampa Bankruptcy Law Blog

3 Reasons Why Bankruptcy Cases Get Dismissed and What This Means for You

Bankruptcy Case Dismissed There are two possible outcomes for those filing for bankruptcy. It doesn’t matter if you qualify for...
Read More

Who Files for Bankruptcy?

Should I File for Bankruptcy? If you’re considering bankruptcy and you feel as if you’re the only person in the...
Read More

3 Reasons Your Student Loan Debt is Ruining Your Financial Future and How Bankruptcy Might Help

Student Loan Debt Taking out a loan or multiple loans to attend college is nothing new. Students have been using...
Read More

What Happens If You Miss Your 341 Meeting?

341 Meetings are One of the Most Important Obligations in Bankruptcy There are several requirements you must meet when you...
Read More

3 Things to Help You with Post Bankruptcy Credit Repair

Bankruptcy Credit Repair One of the biggest challenges you’ll have post-bankruptcy is getting credit extended to you. But for most...
Read More

What is the Real Reason People are Filing for Bankruptcy?

Can filing for bankruptcy help you with unpaid medical bills? One of the most common misconceptions about bankruptcy is that...
Read More

What You Need to Know about Bankruptcy Court

Bankruptcy Court Bankruptcy is a process that many people find intimidating. In part, this is because they must turn their...
Read More

What to Expect from Bankruptcy Counseling

Bankruptcy Counseling Filing for bankruptcy is not an easy decision. For many, it’s their only option for getting the debt...
Read More

Why Hiring a Bankruptcy Attorney is Worth the $ [Infographic]

Everyone who files for bankruptcy must complete a bankruptcy petition. It can be up to 40 pages and filled with...
Read More

What Really Happens When You Declare Bankruptcy?

How to Declare Bankruptcy Bankruptcy is a last resort for many who file. After attempting to clean up a messy...
Read More

Contact Us

Search Website

Archive

Request a FREE Consultation

For The Next 5 Days Get A Free Book About Bankruptcy

Bankruptcy Book

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

Pay OnlineBankruptcy Courses

National Association Of Consumer Advocates Logocomodoavvo1avvo2avvo3LEA
BBB LogoRG Seal

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


Tampa Bankruptcy Lawyers Map

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





Maps & Directions

At the Tampa Bay law firm, the Law Offices of Robert M. Geller, P.A., we help people with consumer bankruptcy matters in the Tampa Bay-St. Petersburg,  Florida communities such as Clearwater,     St. Petersburg, Tampa, Thonotosassa, Riverview, Lutz, Plant City, Brandon, Carrollwood, Wesley Chapel, St. Petersburg Beach, Lakeland, Mulberry, Dade City, Pinellas Park, Largo, Seminole, Odessa, Oldsmar and Lithia, and counties such as Hillsborough County, Pinellas County, Pasco County, Polk County and Manatee County.