Bankruptcy Process Miami

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What is Bankruptcy? Introduction to Bankruptcy Process Miami

There are many people with little information about bankruptcy currently in the United States, so they believe that this can be overwhelming and can even destroy their credit, but the truth is very different. If you feel drowning in debts and not knowing how to resolve the situation, you should consider the fact that filing bankruptcy is the best solution to solve your financial difficulties. The bankruptcy process is the perfect solution to improve financial distress and debts incurred by many people. The different types of bankruptcy are established under federal law in the judicial courts of the state according to the case and they are aimed at the total cancellation of debts.

Since 1978 six (6) types of bankruptcy were developed in USA, but the most common are really under Chapters 7, 11, 12 and 13. Chapter 7 is also known as debt settlement, Chapter 11 a reorganization bankruptcy , Chapter 13 is a strategy payment plan called acquired wages and Chapter 12 meets the same requirements as Chapter 13 but is entitled to those debtors who are engaged in agriculture and fishing.

The current Bankruptcy Code has been amended several times since 1978. Within the amendments the act prohibits the employment discrimination against those who have declared bankruptcy. (See more information about credit on our website detailing the steps to achieve the credit after bankruptcy).

Bankruptcy Definition

Bankruptcy process Miami can be a difficult process through which companies as well as individuals can eliminate their debts and the bankruptcy court will defend them. The concept of bankruptcy may get quite large and has had great impact in the history of USA. In the year 1980, 300.000 people filed bankruptcy; in 1990 this value was significantly increased by half, 600.000 people and companies went bankrupt. Since 2006 the values were increasing more and more to the point that 2 million people were declared in bankrupt. According to several studies performed, people with uncontrollable debts are those:

  • Individuals with an average age between 35 and 38 years.
  • 45% of borrowers are usually marriages.
  • 35% of debtors are single women who have no way to cover their debts.
  • 26% to 28% are single men.
  • Professionals, with a higher educational level and no jobs.

Evolution of Bankruptcy in the United States

The term bankruptcy in the United States has its beginnings in the 1800s, where the U.S. Congress passed the first law on bankruptcy. Traders were the only ones authorized to file bankruptcy. No one else could voluntarily become bankruptcy debtor. Debtors could only establish bankruptcy six months in advance and were obliged to meet one of the acts covered in the bankruptcy law. For 40 years after the establishment of the law the United States had no federal bankruptcy legislation and material assets of the debtors were handled by creditors (creditor is a person or institution that extends credit by giving borrowed money to be paid later) on insolvency laws depending on the state where the case arose. Due to this situation, the United States suffered an economic crisis, so in 1841 a new law called “Federal Bankruptcy Code,” which origins were rooted on British law, was established. This law not only benefited merchants but also those with large financial debts. This law was nullified in 1843 due to the continuous attacks of creditors who did not agree with the law.

After the Civil War in 1867, the third law on bankruptcy emerged, this continued the criteria that any merchant and non-merchant had the right to voluntarily file bankruptcy. In 1874 it was established that to declare bankruptcy an individual had to commit some actions constituted in the bankruptcy law, unless the properties of the debtors were below 30 percent of payables. In the same year the reform that debtors could be understood with creditors on a debt within a judicial commission emanated. In 1878, the bankruptcy law established in 1867 disappeared. The Bankruptcy Act of 1898 also known as Nelson Act was the first United States Act of Congress that gave the companies an option of being protected from creditors.

The Bankruptcy Reform Act of 1978, referred to as the Bankruptcy Code, completely replaced the former Bankruptcy Act of 1898, where the administrative guidelines of the case occur amended. Chapter 7 appears as the most common form of bankruptcy throughout the United States and also combines 10 and 11 that becomes 11.

In 2005, further reforms on bankruptcy law called Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) reappeared. This law establishes that borrowers must demonstrate complete inability to pay their debts that information will be verified in more detail and the individuals will have to attend courses on credit and economy. This prevents debtor’s abuse on eliminating debts with Chapter 7.

The bankruptcy process is codified under federal law in Title 113 of the Congress of the United States. The Constitution states in Article No. 1 that bankruptcy is a legal right of all American citizens residing in any state within the USA. Bankruptcies are run by specialized bankruptcy judges belonging to the committees of bankruptcies in the corresponding Federal District.

Types of Bankruptcies

There are several important chapters often used by most of the people or institutions with economic difficulties. Chapters 7, 11 and 13 are going to be used depending on several factors such as the income of every individual, debts, assets, accounts to pay and the goals the debtor would like to reach by filing the bankruptcy.

  • Chapter 7: also known as settlement is the law process created for companies and individuals with property, with the objective of eliminating all debts acquired. Obtaining a discharge in Chapter 7 bankruptcy means that you can continue with your life without worrying about your debts since they will be canceled during the bankruptcy process. In Chapter 7, the debtor does not have to worry about creditors since she/he has no obligation to settle the debts.
  • Chapter 11: it is aimed at large American businesses, which are under financial distress and bankruptcy is the solution to reorganize and achieve financial stability. Chapter 11 also can be used by independent debtors with large amounts of debt. This type of bankruptcy is for limitless debt and the debtors may continue working their business under the control of the bankruptcy court; thus, the creditors will benefit.
  • Chapter 13: It is also known as acquired wages and is a process in which the debtors propose a repayment plan to make installments to creditors. Once the court confirms the plan, the debtors must make the plan succeed, allowing them to pay all their debts over a period of time between 3 to 5 years, without the risk of losing their properties. Debtors must have a maximum amount of $ 250,000 dollars in unsecured debts and $ 750,000 secured debts to apply for this type of bankruptcy.

What you need to know when filling Bankruptcy?

Anyone with serious financial difficulties can file bankruptcy, but there are certain precautions that the debtor must have in mind when going bankrupt, including:

  • The process can become complicated and extended so may affect individuals emotionally.
  • Sometimes bankruptcy can affect your credit up to 7 years later.
  • Bankruptcy laws underwent dramatic changes since 2005 so many experts needed bankruptcy lawyers to help them get the maximum benefit provided by these laws.

Bankruptcy Process Miami

The bankruptcy process is a complex but powerful tool if carried out with the help of a good bankruptcy attorney. Firstly, you must contact our office where our bankruptcy lawyers at Gallardo can advise you through the process to achieve the desired objectives. A report of your assets, income, debts and any additional information about your creditors are then obtained. The lawyer will determine the best type of bankruptcy that corresponds according to your specific financial situation, it is to say, Chapter 7, 11 or 13 bankruptcy. From this time, the Miami bankruptcy lawyer presents the case in federal district court, where it is deeply evaluated to be sure you are eligible for the type of chapter presented.

If the type of bankruptcy is Chapter 7 or 13, the debtor must also file a report to show that advice of using credits to be eligible to declare bankruptcy was received. Then, the debtor must appear at a meeting known as 341 and answer questions from a team of lenders in Florida. Depending on the type of bankruptcy that is filed, the debtor may have to appear before the bankruptcy judge. At the end, the judge will issue an order saying your debt has been discharged (under Chapter 7) or grant you the repayment plan (under Chapter 13).

Bankruptcy Consequences

Filing for bankruptcy can bring some important consequences that debtors should consider such as:

  • Debtors cannot manage the properties after filing bankruptcy; this is done by a court representative.
  • Creditors have no legal authority to seize for themselves the assets of debtors.
  • You will be given the right to request alimony from creditors.
  • Creditors do not improve their position after a bankruptcy.

Importance of the Bankruptcy Law

The process can provide a number of benefits and relief to debtors, including but not limited to: the avoidance of harassing telephone calls, letters, and even lawsuits from creditor; it forces creditors to terminate any action against the debtor such as foreclosures, evictions, and repossessions. Bankruptcy allows the possibility to keep certain categories of property which had been acquired previously. In addition, it grants debtors a fresh start. Filing Chapter 7 and 13 bankruptcies serves to cancel debts such as credit cards and other personal debts.

Bankruptcy Attorney in Miami

Bankruptcy laws have been designed to help individuals in their financial crisis. A bankruptcy attorney can help you to better navigate the whole bankruptcy process from start to finish. You can recover your finances and move forward to a more financially stable future with the legal assistance from a respectable firm such as Gallardo law Firm. There are many choices you can make depending on your particular situation. Your current financial situation can be restored faster with the help of a qualified lawyer. Lawyers understand more bankruptcy laws in Florida and they know all the legal options available for you and which type of bankruptcy is more beneficial for you. Hiring an experienced attorney is a good investment as it will save you time and money in the long run.

The process is the mechanism carried out in federal court through bankruptcy laws established in the United States, to protect and assist individuals or businesses to solve the problems of payments to other institutions known as creditors. 
All those individuals and companies with large financial debts that cannot be resolved by themselves and need to rely on one type of bankruptcy. Bankruptcy works best for borrowers who may have some type of income that helps them cover their expenses after discharging the chapter in the case.
With bankruptcy, debtors are generally freed from almost all the debts , but there are some fixed payments that are not eliminated by filing bankruptcy, including: child support payments and alimony, payment of fines, student loans , taxes and committed fraud. Besides, debts for driving under the influence of drugs and alcohol and other debts that were not canceled in prior bankruptcies.
You have to stop using credit cards if you are considering filing bankruptcy, because the judge will review all of your debts and can establish some kind of fraud linked to the cards.
The time depends on what type of bankruptcy you are filing; if it is a Chapter 7 bankruptcy it only takes 2 to 3 months from the time it was filed. For bankruptcy under Chapter 13, the process can take 3 to 5 years depending on the payment plan submitted to the court and which one was approved by the judge
The time depends on what type of bankruptcy you are filing; if Chapter 7 bankruptcy only takes 2 to 3 months from the first time it was filed . For bankruptcy under Chapter 13, the process can take 3 to 5 years depending on the payment plan submitted to the court and which one was approved by the judge.
In most cases bankruptcy debtors can keep all the properties as they are able to consolidate debts. Also they can maintain their retirement income.
There is no minimum amount established, if you need to protect your property from creditors then it is necessary to consider bankruptcy.
When the process of bankruptcy is presented to the court the judge orders the creditors to stop the foreclosure process on the properties of the debtor, creditors cannot continue with the eviction of their property, no harassing telephone calls, otherwise the court may punish the creditors for their behavior.
The application time depends on the type of bankruptcy for which you applied the first time, sometimes you have to wait at least six years to settle back in bankruptcy again. The right to bankruptcy is very important so it is recommended to consider the case well before filing bankruptcy.
No, the debtors are not going to prison for having accounts payable with creditors, unless they have committed a federal crime of fraud. Creditors may only collect debts through the court and asking the judge for a claim against the debtor for a money judgment. If the creditors succeed with the demand, 10% of the wages of the debtor could be removed, checking bank account may be cancelled before the debtor withdraws the money from it. The creditors can also seize some of the debtors properties, but what they cannot get is an arrest warrant for debtors, this is impossible.
There are few disadvantages that exist with respect to the bankruptcy process. The bankruptcy will remain on your credit history for roughly a 10-year period after going bankrupt, which sometimes results in the disapproval of new loans and student loans and even renting an apartment. With chapter 7 bankruptcy the individual might lose some of the properties that were declared not exempt because they would be sold to make the payments.
The cost of the bankruptcy varies depending on the lawyer to advice and how complex it can become. The individual filing bankruptcy might need to do some fixed payments to court ranging from $200 to $300 depending on the type for bankruptcy and there are some government agencies that fund this type of cost for those with low incomes.