There are plenty of misconceptions about filing bankruptcy that may have given you the wrong idea about it. First of all, you should know that not all states have the same laws concerning bankruptcy. As a matter of fact, bankruptcy in Florida is based on some of the most lenient bankruptcy legislation in the whole country. There is no stigma involved with bankruptcy as there used to be. If you are stuck in an endless cycle of debt, see a qualified bankruptcy lawyer today.
If you file Florida bankruptcy, then odds are you a filing Chapter 7, also known as liquidation or ‘straight' bankruptcy. This is the best way to file bankruptcy as you won't lose all of your possessions. However, not everyone is entitled to file Chapter 7 in Florida. The state of Florida also has certain exemptions on property so you don't have to worry about your creditors taking it. For example, you don't have to worry about losing your home or vehicle in most cases. When you file for Chapter 7 bankruptcy in Florida, you also may leave out certain debts such as your mortgage or auto loan. You may even leave out a credit card or two. This is known as reaffirmation of debt. This is telling a creditor that you wish to hold onto the debt as you can pay it off.
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The reason why most people would declare Chapter 13 bankruptcy in Florida is in order to hold onto their homes. For example, if your home is about to be foreclosed upon, you may file for Chapter 13 so that you can set your payments to something you can afford. Together, you and your creditors will work out a debt payment schedule, so you can have your debts paid off in five years. During the time after you file for Chapter 13, your mortgage company is not legally able to foreclose upon your home.
One of the most common questions regarding bankruptcy is how long your credit rating will be affected. When you declare bankruptcy in Florida, it will stay on your credit rating for seven years in case of Chapter 13, and 10 years in case of Chapter 7. The reason for this is that credit reporting agencies are required by law to keep this information on your reports for this period of time.