What are Alternatives to Filing for Bankruptcy in Florida?

Clients come see me on a regular basis and I tend to ask them a lot of questions regarding their assets, debts, and regular income.  Every once in a while I come across a client that I would consider to be borderline, and by that I mean they have either the option to file for bankruptcy or because their debts aren’t too high when compared to their income, there may be an alternative means to resolve their problem.  Here is an example:

If someone came to see me who has 20k in credit card debt but makes 50k a year and has the ability to save money and settle the debts then I would likely have them speak to a debt negotiator to see if settlement is the best option for them.  For debt settlement the debtor will need to pay about 30-50% of the debt they owe, either in a few payments or as one lump settlement.

If we use the same example above but the person had no job, no source of income, then ideally I would file their bankruptcy no questions asked.

Here are your options if you are in the gray area

Debt Settlement –  In the debt settlement world the client will likely not be able to negotiate with the credit card company if they are current on their debts.  Instead the client needs to be between three to four months delinquent before credit card companies will be interested in a settlement.   These type of settlement will be between 30-50% of the debt owed in either a lump sum payment of a few months worth of payments.  Be careful of companies that you use to settle your debts for you.  Many companies put you on a monthly payment plan where they front load their fees.  I.E. a monthly payment plan of $500 a month where $475 is their fee and $25 goes into an escrow account.

Debt Consolidation – Consumer credit counseling companies put you into a monthly repayment plan where you pay 100% of your debts back, but in a longer period of time.  They also tack on an additional 10-20% for their fees.  You don’t really save anything by choosing this option.

If your debt isn’t too great then perhaps it would be wise to consider non-bankruptcy alternatives in Florida.  However if you feel that you can’t afford to pay back the debt then maybe bankruptcy would be the best option for you.

If you are thinking of filing for bankruptcy or would like options about bankruptcy alternatives then contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer free consultations in any of our office locations including Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

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