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The Bankruptcy Law Clinic Blog

Sunday, March 17, 2013

Different Types of Debt and How They’re Treated in Bankruptcy

 

Many people have questions regarding how their debts will be handled after filing for bankruptcy and the answer depends on the type of debt that is owed.  Most debt falls under the following categories:  secured debt, general unsecured debts and priority debts.  Each will be handled slightly differently in your bankruptcy. 

Secured Debts

A secured debt is a debt that is secured by collateral.  These types of debts include car loans, mortgages or any other debt when there is property that can be repossessed or taken if the debt isn’t paid.  In most cases, if you want to keep a secured debt, you can do so while still wiping out your other debt. Converselly, if you are ready to walk away from your house or car, you can do that as well.When a secured debt is handled in bankruptcy, the trustee will consider the debt’s collateral versus how much is owed.  Also, some debts can be partially secured and partially unsecured, such as when you owe more on a home or vehicle than it is worth. 

General Unsecured Debts

Any debt that is not secured by collateral is known as an unsecured debt.  Most credit cards, personal loans, payday loans and medical bills fall into this category. 

Priority Debts

Priority debts are debts that receive priority because the law treats them as being more important than unsecured debts.  These debts usually include child and spousal support; the administrative costs of the bankruptcy case, including trustee fees and attorney fees; wages and other forms of compensation owed to employees if it is a business filing for bankruptcy; certain income taxes, and some other kinds of taxes.

How Each Category Of Debt Is Handled In A Bankruptcy

In a Chapter 7 bankruptcy, if assets are liquidated, the debts that are considered high priority are paid first; in many cases, the unsecured debts aren’t paid at all, or are only paid partially. 

In a Chapter 13 bankruptcy, the repayment plan created by your trustee will have all priority debts paid before the case is completed. 


Sunday, March 10, 2013

When Is It Time To Consider Bankruptcy?

No one ever really wants to file bankruptcy.  But here is a list of 5 questions to help you decide if it's time to call us for a free consultation...


Read more . . .


Saturday, March 2, 2013

Different Types of Debt and How They’re Treated in Bankruptcy

 

Many people have questions regarding how their debts will be handled after filing for bankruptcy and the answer depends on the type of debt that is owed.  Most debt falls under the following categories:  secured debt, general unsecured debts and priority debts.  Each will be handled slightly differently in your bankruptcy. 

Secured Debts

A secured debt is a debt that is secured by collateral.  These types of debts include car loans, mortgages or any other debt when there is property that can be repossessed or taken if the debt isn’t paid.  In most cases, if you want to keep a secured debt, you can do so while still wiping out your other debt. Converselly, if you are ready to walk away from your house or car, you can do that as well.When a secured debt is handled in bankruptcy, the trustee will consider the debt’s collateral versus how much is owed.  Also, some debts can be partially secured and partially unsecured, such as when you owe more on a home or vehicle than it is worth. 

General Unsecured Debts

Any debt that is not secured by collateral is known as an unsecured debt.  Most credit cards, personal loans, payday loans and medical bills fall into this category. 

Priority Debts

Priority debts are debts that receive priority because the law treats them as being more important than unsecured debts.  These debts usually include child and spousal support; the administrative costs of the bankruptcy case, including trustee fees and attorney fees; wages and other forms of compensation owed to employees if it is a business filing for bankruptcy; certain income taxes, and some other kinds of taxes.

How Each Category Of Debt Is Handled In A Bankruptcy

In a Chapter 7 bankruptcy, if assets are liquidated, the debts that are considered high priority are paid first; in many cases, the unsecured debts aren’t paid at all, or are only paid partially. 

In a Chapter 13 bankruptcy, the repayment plan created by your trustee will have all priority debts paid before the case is completed. 


Saturday, March 2, 2013

We opened a Broward office!

We are proud to announce our new Fort Lauderdale  office to better serve our Broward and Palm Beach clients:


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Tuesday, January 15, 2013

Are there some things I shouldn't tell a bankruptcy attorney

Short version:  NO!  Tell your bankruptcy attorney everything!  Here's why....


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Friday, January 11, 2013

Filing Bankruptcy Can Stop Your Wage Garnishments

Garnished wages are something no one wants to deal with, especially when a too-tight budget makes living paycheck to paycheck a common occurrence.  However, if you find yourself in this situation, it is important to know that filing bankruptcy stops all garnishments except child support and alimony...


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Wednesday, December 12, 2012

What will happen to my car loan in a bankruptcy

Anyone who is considering bankruptcy will likely be concerned about its effect it will have on car loans, since such loans are considered secured loans, with the vehicle as collateral.  Florida has bankruptcy exemptions that allow most people to keep their vehicle but what if you aren't sure if you want to.  So how do you know what will happen to your car before you make the choice to file?


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Friday, November 9, 2012

How much do you need to owe to do a bankruptcy?

At least twice a week I get a phone call that asks the question “How much do I have to owe to qualify for bankruptcy”.  It’s a fair question, but not the right one.  The real question is about your ability to pay.  If you are unemployed, even a minimal payment can lead to ruin.  Sometimes, even if you can make the minimum credit card payment, you may be better off filing bankruptcy.


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Friday, October 12, 2012

Will I Lose My Security Clearance if I File for Bankruptcy?

This question is common among members of the Armed Forces or Federal employees and can often cause hesitation when making the decision of whether or not to file bankruptcy.  While each situation is different, the answer in most cases is no.  The reason for this is simple:  when someone is in a difficult financial situation, they are more likely to make a poor decision or accept a bribe in order to remedy the situation.


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Friday, October 12, 2012

More real thank you letters from clients

These always makes us feel good.  One great thing about being a bankruptcy law firm is that almost all our clients love us!...

 

From website
From website

 

We wiped out over 65 thousand dollars for this lady.  Awesome!

 

 


Thursday, September 27, 2012

How Disability Income Can Affect your Bankruptcy Filing

Florida has a statute that keeps this income safe from creditors who seek judgment against you.  This means that most creditors cannot garnish your disability wages-but there is an exception....


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