How Does Filing for Bankruptcy Work in West Palm Beach, Florida?

Bankruptcy is one of the hard realities that we may all face at some point in life. Whether it be the financial collapse of a business or an individual's accounts, bankruptcy marks a crucial point in a person's financial history. As with every challenging situation, it’s best to be informed about what’s happening before you’re faced with managing a bankruptcy.

A West Palm Beach Bankruptcy Attorney is one of the best people to consult when taking the necessary steps toward financial relief. Their experience and wisdom regarding bankruptcy procedures can empower your decisions when delving into the intricacies of filing for bankruptcy in West Palm Beach. Call them today to learn what legal options could be right for you.

What is Bankruptcy?

The legal process structured to provide financial relief to individuals and businesses suffering under the burden of overwhelming debt is called bankruptcy. It utilizes court-supervised restructuring or liquidation of assets to repay outstanding debts. Bankruptcy focuses on offering a fresh start to debtors while ensuring fair treatment for creditors.

Chapter 7 or Chapter 13

The vast majority of bankruptcies in West Palm Beach are Chapter 7 or Chapter 13. The one you choose will depend on the details of your financial situation. That includes considering your plans for moving forward once you’re out of bankruptcy status. Choosing the right Chapter is vital, as the wrong filing might lead to less-than-ideal financial conditions.

Often referred to as "liquidation bankruptcy," Chapter 7 bankruptcy hinges upon the sale of non-exempt assets to repay creditors. Specific assets, such as a primary residence, could be liquidation-exempt. This chapter tends to suit the needs of individuals with lower incomes and fewer assets.

Alternatively, Chapter 13 bankruptcy, aka "reorganization bankruptcy," empowers individuals to restructure their outstanding debts according to a court-approved repayment plan. Such a plan spans three to five years and focuses on empowering debtors to retain their assets as they gradually repay their debts.

The Filing Process

West Palm Beach processes bankruptcy applications through a specific application portal. From there, applications are either approved and moved forward, or they’ll need to be altered and resubmitted. The steps you’ll need to take when filing for bankruptcy include:

Consultation with a Bankruptcy Attorney

While there's no legal requirement to consult an attorney, there are practical reasons why this is the first step. Bankruptcy filing procedures are known to be tedious, confusing, and deeply unfamiliar undertakings for individuals who aren’t specialists in the field. Thus, it’s advisable to consult with a qualified bankruptcy attorney in West Palm Beach before filing.

Once an experienced attorney has assessed your financial situation and shared their recommendation on which will be the most suitable chapter to file under, you can then formally begin filing for bankruptcy.

Credit Counseling

Before filing for bankruptcy, individuals are legally required to participate in credit counseling from an approved agency. The goal of credit counseling is to evaluate your financial situation and explore alternative solutions to bankruptcy. Once you complete counseling, you’ll receive a certificate, which is a prerequisite for filing.

Preparing and Filing the Bankruptcy Petition

A bankruptcy petition must be completed and submitted. You’ll team up with your attorney to consult on and compile the following details about your finances:

• Current Income

• Projected future income

• Expenses

• Assets

• Liabilities

• Tax returns and more

This information is then organized and used to prepare the bankruptcy petition. The petition is filed with the bankruptcy court in West Palm Beach.

Automatic Stay

An automatic stay goes into effect once the filed petition has been submitted. This is a legal provision halting all collection activities. That includes wage garnishments, creditor calls, and foreclosure proceedings. Automatic stays provide immediate relief to debtors and gives them a less stressful environment in which they can navigate the bankruptcy process.

Meeting of Creditors (341 Meeting)

Somewhere around 20 to 40 days post-filing, you’ll attend a Meeting of Creditors. This is also called the 341 meeting. It’s where you, your attorney, and a court-appointed bankruptcy trustee meet to discuss the state of your finances. Creditors are welcome to attend but rarely do. This is where the trustee scrutinizes the accuracy of the information in your petition.

Chapter 7 - Liquidation

For those who choose to file for Chapter 7 bankruptcy, the liquidation proceedings commence after the Meeting of Creditors. Trustees identify non-exempt assets, sell them, and distribute the proceeds among your creditors. Any remaining eligible debts are discharged, providing you with a fresh financial start.

Chapter 13 - Repayment Plan

For those who choose to file for Chapter 13 bankruptcy, the focus shifts to executing a court-approved repayment plan. Throughout a given period, (typically three to five years), you make payments regularly to the trustee. After doing so, the trustee distributes the funds to the creditors. Once the plan is completed, the remaining debts are discharged.

Post-Bankruptcy

While the goal of bankruptcy is to provide relief from debt, it’s wise to remember that credit scores are affected by these activities and should therefore be monitored closely. With strategic financial management, credit can typically be rebuilt over a five to six-year period. A smart budget, developing secured credit, and consistently making timely payments rebuild credit.

Down But Not Out

In West Palm Beach, Florida, filing for bankruptcy is a sizable and often intimidating financial decision. Careful consideration and benevolent guidance are known to make things better. Regardless of whether it’s Chapter 7 or Chapter 13 bankruptcy, the processes are more similar than different. Consult a bankruptcy attorney to learn more about anything you’re curious about.

There was once a shameful stigma that surrounded filing for bankruptcy, but times have changed. Bankruptcy may be a form of financial crisis, but it doesn’t have to bleed over into other areas of your life. There are ways to stay informed, focused, and balanced while taking the steps to regain control of your financial future. Each step taken is worthy of praise.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.