In Deerfield Beach, Florida, bankruptcy is a court procedure in which a person or business has some or all of their debts cleared (or "discharged"), theoretically allowing them to begin with a clean slate, and move on with their lives no longer drowning in debt (and hopefully having learned to better manage their use of credit in the process). However, bankruptcy should not be treated as a way to avoid debt that one simply doesn't feel like paying. It is meant to be a safety net for people or businesses who are honestly unable to pay off their debts. Because bankruptcy is not without negative consequences (such as a heavily damaged credit rating for many years afterward), it should be viewed as an option of last resort.
Accordingly, you should speak with a good Deerfield Beach, Florida bankruptcy lawyer. Your Deerfield Beach bankruptcy lawyer can inform you of the costs and benefits of filing for bankruptcy, and give his or her professional advice as to whether or not it's a good option, given your individual circumstances.
Types of Bankruptcy in Deerfield Beach, Florida
In Deerfield Beach, Florida, 3 types of bankruptcy procedures are in common use: Chapter 7, Chapter 11, and Chapter 13. Being governed by federal law, the procedures involved in filing for bankruptcy in Deerfield Beach, Florida will be roughly the same as everywhere else in America. Chapter 7 bankruptcy involves liquidation of part of the debtor's assets to pay off as much of his or her debt as possible. Once the liquidation is fulfilled, and the proceeds given to the creditors, the rest of the debt is discharged. Liquidation is essentially selling assets to the highest bidder. Only some of the debtor's assets have to be sold, and numerous classes of property are exempt, meaning that the debtor can keep them, including homes, cars, insurance policies, and retirement accounts. It should be noted that certain types of debt cannot be discharged through Chapter 7 bankruptcy, including student loans, child support payments, criminal fines, and recent taxes.
The other frequent bankruptcy scheme used by consumers in Deerfield Beach is Chapter 13 bankruptcy. In this system, debt is not discharged. Instead, it is restructured. This allows the debtor to have the terms of the contracts that gave rise to their debts in the first place thrown out, and replaced with new terms that call for a structured repayment plan, designed to allow the debtor to survive on whatever income they have, and allowing the creditors to get paid back eventually. Once a payment plan is authorized, creditors are not allowed to attempt to collect payment under the original agreements. Though accessible to individuals, Chapter 11 bankruptcy is generally used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is presented, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.
While going through Chapter 11 bankruptcy, a business can continue operating, and its stock can continue to be traded.
How Can a Deerfield Beach Bankruptcy Lawyer Help?
Filing for bankrtuptcy in Deerfield Beach is a huge decision with costs and benefits that must be weighed carefully. Before filing, it would be a good idea to speak with a seasoned Deerfield Beach bankruptcy attorney.