Miami residents facing bankruptcy can be forgiven if they're worried that their financial health will never be strong again. However, as a recent story by the San Francisco Chronicle says, declaring bankruptcy can actually provide struggling consumers with a second chance to live a financially healthy life.
The key is for consumers to take the right steps after their Chapter 7 or Chapter 13 bankruptcy is closed. This means making smart financial decisions and gradually rebuilding their damaged credit scores.
According to the Chronicle story, there is no quick way for consumers who have declared bankruptcy to rebuild their credit scores. This doesn't mean, though, that such consumers are consigned to a bad credit score for the rest of their lives.
Avoiding financial problems after declaring bankruptcy
'Octomom's' Chapter 7 bankruptcy dismissed
It is likely that most residents of Miami are familiar with Nadya Suleman, dubbed "Octomom," after she gave birth to eight babies a couple years ago conceived with the assistance of an anonymous donor via in vitro treatments. When she gave birth to the octuplets in January 2009, she became mother to a total of 14 children. Despite providing indications that she would be able to capitalize on her new found fame, few have come to fruition and the single unemployed mother recently filed for Chapter 7 bankruptcy.
According to the court filing, Suleman may owe $1 million to various creditors. In addition to being $30,000 behind in rent, she also owes money to the water department, her father, DirecTV and a school some of her children attend. In contrast to the amount she is in debt, she indicated a total of $50,000 in assets.
Miami residents could see increase in foreclosures
Many people throughout the nation are facing financial difficulties. In some cases, these difficulties put homeowners' houses at risk for being lost in a foreclosure. Though the number of these actions has fallen off over the course of that last couple of years, following the predictions of experts, the number is once again on the rise.
The number of foreclosures in areas such a Miami have been unbelievably low, and come to nearly a complete standstill due to the robo-signing scandal which multiple banks were involved in. The reason for the increase now is the recent $26 billion settlement reached in the matter.
Florida attorney general has windfall to use on foreclosure help
Tens of thousands of Florida residents stand to benefit from the state's share of the national foreclosure settlement -- and they can have a say in how they want it distributed. The state attorney general has received about $300 million to go toward some kind of foreclosure prevention programs, and she's looking for suggestions about how to apply the money.
Florida's share of the $25 billion nationwide settlement amount totals more than $8 billion. Most of that amount is going to current homeowners to help with modifying their loan and principal payments, or for short sales or moving assistance for those who aren't able to remain in their homes.
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Follow bankruptcy counseling rules before court appearances
The Bankruptcy Abuse Prevention and Consumer Protection Act (2005), the first major bankruptcy law reform in two decades, requires all filers to have financial and credit counseling sessions. Although mandatory pre-bankruptcy counseling has been the rule since the act took effect, many consumers express surprise when advised of this necessity. Miami residents are no exception, since bankruptcy is, hopefully, a once-in-a-lifetime financial solution.
While more Americans than ever, are choosing to file for either Chapter 7 or Chapter 13 bankruptcy to deal with their financial woes, most consumers are completely unaware of the "intricacies" of this federal law. Having so much "company" does not eliminate the trauma and uncertainty of entering bankruptcy. The lack of a strong rebounding economy has fueled recent spikes in bankruptcy filings. Most people are still waiting for the real estate market to awaken, further spurring bankruptcy filings, as foreclosures continue on a large scale.
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School loans remain after bankruptcy discharge for Floridians
With tuition rates skyrocketing for colleges and universities throughout the nation including those located in Miami and South Florida, to attain a higher degree, many are forced to take both private as well as federal loans. As we wrote about in a previous blog post, some financial experts expect the next wave of individuals facing bankruptcy to be students saddled with debt from higher education loans. For some former students the future is now.
Individuals who find themselves with a lot of debt from multiple sources, including from school loans, are filing for bankruptcy in an attempt to start over with a clean slate. Unfortunately, the end result is not always all that they hope for. This is because often the heavy debt burden brought about by school loans is in the form of private school loans which is not dischargeable in a bankruptcy proceeding.
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Home foreclosures in limbo -- some for years
One of the well known ways to stop a home foreclosure is to file for bankruptcy. The foreclosure proceedings are temporarily halted as the bankruptcy proceedings move forward. Apparently another way to deal with a foreclosure is to do nothing, if you live in Palm Beach County.
For a number of reasons, home foreclosures in Palm Beach County are backlogged. According to news sources, almost 7,000 foreclosure cases are on the books, some of them since 1997. Most of the so-called "zombie files" date back to the recent burst of the housing bubble. There are 39,252 foreclosure cases pending in Palm Beach County, and the zombie files are about 17 percent of them.
Miami residents likely to use income tax refunds in bankruptcy filings
Tax day has come and gone and some people in the Miami area have received a refund. While some of these people are thinking about what to do with the influx of funds, others already know how they will use the money. Some will make a purchase while others will put the money away for a rainy day. For those facing financial difficulties, an income tax refund may provide the funds needed to seek a fresh start.
Throughout the United States, more than 200,000 taxpayers will use the money they receive from their income tax returns to file for bankruptcy, according to a study recently conducted by the National Bureau of Economic Research. The expected increase in bankruptcy filings in the early part of 2012 is not an anomaly.
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Bankruptcy protection for your IRA
Few individuals in Miami plan for filing bankruptcy petitions. Circumstances, often beyond anyone's control, dictate the need for many to file. In 2011, almost 1.5 million Americans needed this protection. However, even with the increase in bankruptcy actions caused by the recent recession, some provisions of bankruptcy remain as a source of confusion to lay persons.
Further compounding this issue is the unusual nature of bankruptcy. It is a federal law that permits individual states to modify certain provisions. Therefore, some regulations may apply in one state, but not in others. These "quirks" emphasize the need for qualified legal assistance with bankruptcy filings.
Young Buck's property to be auctioned in bankruptcy
Yet another celebrity is in the spotlight after having filed for bankruptcy. Late last year, rapper Young Buck filed for Chapter 7 bankruptcy protection. Since then, as is the case in Chapter 7 bankruptcy proceedings, he has been assigned a bankruptcy trustee.
Each year, many people facing financial hardship file for Chapter 7 bankruptcy. Under this particular chapter, the assets of the person who files are sold and the proceeds are passed along to creditors. For most people these assets are items commonly owned by people throughout the Miami area. In some cases however, the assets can be more extravagant such as fancy cars and vacation homes. In some cases, intellectual property may also be liquidated.
