When people are considering bankruptcy, one of the first concerns that they may have is how this decision will affect their future. For example, many may ask whether retirement savings is exempted under bankruptcy law and if creditors can take their 401(k)s. Here is a look at how bankruptcy can affect a person's 401(k) retirement plan in Florida and other states.
For most people, the option of filing for bankruptcy is not considered lightly. Especially when filing for Chapter 7, people are concerned with what the bankruptcy exemptions will be and what will happen to their property. These exemptions allow filers in Florida and other states to get a fresh start on their debt while being able to keep a certain amount of their possessions.
One of the questions that people often ask about bankruptcy and filing Chapter 7 is whether they will be able to keep their car. The car exemption is especially important to those who have paid their auto loan off and owe nothing on the vehicle. Many Florida residents want to know if they can pay the trustee and keep the car since it is often the only form of transportation that they own.
Chapter 13 bankruptcy is a bit different than a Chapter 7 bankruptcy in several ways. One of those differences has to do with exemptions. While Florida has its own set of laws that classify the various properties that are exempt, there are several types of exemptions common to most states. These include a car exemption, house or homestead exemption, clothing and personal item exemption, and jewelry exemption.
When a person files bankruptcy, it is basically a way to get protection from creditors. In Florida, as in all states, the proceedings are handled through the federal Bankruptcy Court, and the presiding judge will appoint a bankruptcy trustee. This trustee handles the selling of the bankruptcy estate property in a Chapter 7 proceeding, in order to pay off some or all of the filer's debts. Not all property has to be liquidated, however. Rather, there are some bankruptcy exemptions and some properties which are not exempt.
Florida grants a homestead exemption for people who owns the property and makes it her permanent residence (or the permanent residence of her dependent). The homestead exemption gives up to $50,000 in exempted property value for taxes. The first $25,000 is available for property taxes, school taxes, and district taxes. The second $25,000 is available for property values between $50,000 and $75,000 in assessed value (however it only applies to non-school taxes).
If you find yourself snowed under with debt, your heart probably sinks every time you hear the phone ring. You probably dread checking the mailbox every day and you live in fear of others finding out what trouble you're in. You might have considered bankruptcy, but you're concerned about how it would look or you're worried you'd have to give up everything.
For some people, filing for Chapter 7 bankruptcy is the best way to get a fresh financial start. There are many advantages to Chapter 7. It will let you hang on to future income, you'll be able to discharge debts and you won't have to adhere to a repayment plan. As with any bankruptcy options, there are some drawbacks. A Chapter 7 filing may remain on your record for up to 10 years and you may have to give up some property to help pay debts.
Many Americans are facing difficult times with mounting debt, and the anxiety of not being able to meet their monthly payments on mortgages, credit cards, and auto loans is extremely stressful. When you are responsible for paying child support, concerns regarding how you can still support your child also come into play. Freeing yourself from the stresses of the financial burden with creditor protection action can be a very real solution to financial debt without affecting your child support payments. As an increasing number of people are left unemployed, ill or injured and facing large bills with little resources, a growing number of Americans are learning that bankruptcy is a viable option.
With the ready availability of credit at historically low rates, more and more people are assuming ever increasing amounts of debt. Unfortunately, carrying large debt loads can leave you vulnerable if there is a change in your current financial situation. A sudden loss of employment, an injury or illness can make it difficult to pay your creditors. While the stresses of juggling credit card bills, car and house payments on top of daily expenses can be alleviated with personal bankruptcy protection, knowing your rights and what is exempt from the proceedings is critical.