How to Use Bankruptcy Protection to End Collection Calls

Maxing out credit cards to enjoy a memorable summer vacation with family can be exhilarating, but the aftermath of dealing with relentless collection calls can be daunting. If you’re a Florida resident grappling with overwhelming debt, bankruptcy protection might be a viable option to regain financial stability. This blog explores how to use bankruptcy protection to end collection calls in Florida, ensuring you have the information needed to make an informed decision.

Understanding Bankruptcy Protection

Bankruptcy is a legal process designed to help individuals and businesses eliminate or repay their debts under the protection of the bankruptcy court. In Florida, the most common types of bankruptcy for individuals are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7, also known as liquidation bankruptcy, allows you to discharge most of your unsecured debts, including credit card debt. To qualify, you must pass a means test, which evaluates your income and expenses to determine if you are eligible.

Chapter 13 Bankruptcy

Chapter 13, or reorganization bankruptcy, involves creating a repayment plan to pay off your debts over three to five years. This option is suitable for individuals with a steady income who can afford to make regular payments.

Steps to File for Bankruptcy in Florida

• Evaluate Your Financial Situation: Before filing for bankruptcy, assess your financial situation to determine which type of bankruptcy is appropriate for you.
• Credit Counseling: You must complete a credit counseling course from an approved agency within 180 days before filing.
• Filing the Petition: File the bankruptcy petition with the Florida bankruptcy court. This includes submitting forms detailing your income, expenses, debts, and assets.
• Automatic Stay: Once you file, an automatic stay goes into effect, halting all collection activities, including calls, lawsuits, and wage garnishments.
• Meeting of Creditors: Attend the 341 meeting, where your creditors can ask questions about your financial situation and the bankruptcy petition.
• Completion of Debtor Education Course: After the meeting, complete a debtor education course to learn how to manage your finances post-bankruptcy.
• Discharge of Debts: For Chapter 7, your qualifying debts will be discharged within a few months. For Chapter 13, you must complete the repayment plan before receiving a discharge.

Benefits of Filing for Bankruptcy

• End Collection Calls: The automatic stay immediately stops collection calls, giving you peace of mind.
• Debt Relief: Dischargeable debts are eliminated, providing a fresh financial start.
• Protection of Assets: Florida’s bankruptcy exemptions allow you to keep certain assets, such as your home and car, depending on the equity.

Considerations and Alternatives

• Impact on Credit Score: Bankruptcy can significantly impact your credit score, but it provides an opportunity to rebuild your credit over time.
• Legal Assistance: Consider hiring a bankruptcy attorney to guide you through the process and ensure all paperwork is correctly filed.
• Debt Settlement: As an alternative, negotiate with your creditors to settle your debts for less than what you owe, though this may not stop collection calls as effectively as bankruptcy.

Filing for bankruptcy in Florida can be a practical solution to end relentless collection calls and address overwhelming credit card debt. By understanding the process and benefits, you can take the necessary steps to regain control of your finances and move towards a more secure financial future. Always consider consulting with a bankruptcy attorney to explore your options and navigate the complexities of bankruptcy law effectively.

Frequently Asked Questions

Q: How long does the automatic stay last?

A: The automatic stay remains in effect until the bankruptcy case is dismissed, discharged, or the court lifts the stay.

Q: Can all debts be discharged in bankruptcy?

A: Not all debts are dischargeable. Common non-dischargeable debts include student loans, child support, and certain tax obligations.

Q: How often can I file for bankruptcy?

A: You can file for Chapter 7 bankruptcy once every eight years and Chapter 13 bankruptcy every two years, subject to certain conditions.

By following the outlined steps and understanding the nuances of bankruptcy protection, you can effectively end collection calls and embark on a path to financial recovery. If you still have questions regarding credit card debt and bankruptcy protection, please reach out to us for a free consultation.