Debt – Fleysher Law

Florida Auto Negligence Lawsuits & Judgments (from a Bankruptcy Attorney Perspective)

Posted on May 24, 2025May 27, 2025 by Emil Fleysher

Are you facing a lawsuit after a car crash? Or are you hurt and trying to get paid? As Florida bankruptcy attorneys, we offer advice about Florida auto negligence lawsuit judgments from a bankruptcy attorney’s perspective.

Florida ranks 10th in the nation for serious car crashes. In 2019, over 3,000 people died in Florida accidents. Even worse, Florida ranks 6th for uninsured drivers. About 20% of Florida drivers have no insurance at all. Being a “No-Fault” state means even insured drivers might not have bodily injury coverage.

After bad accidents, huge debts often push both hurt people and at-fault drivers to file bankruptcy. You need to know your options to protect your money and future.

The Reality of Uninsured & Under-Insured Drivers in Florida

Most Florida drivers have only the minimum legal coverage – just $10,000. Many skip better coverage because it costs too much. This risk puts their financial future in danger when someone files a personal injury case against them.

In serious car crashes with injuries, medical bills can be huge. When the at-fault driver has bodily injury insurance, it helps cover the victim’s medical bills within the policy’s limits. But what if there’s not enough coverage?

Without good insurance, the injured party must pay their medical bills. They only get money back if they have “uninsured motorist” coverage. This often forces both sides to think about bankruptcy, especially when there’s a large balance owed after an accident.

How Uninsured Motorist Coverage Works in Florida

Uninsured motorist coverage lets the injured person get help from their insurance when the at-fault driver lacks good insurance. The victim’s insurance pays them and then sues the at-fault driver through a process called “indemnification.”

Without this coverage, the injured person must try to get money directly from the at-fault driver. This usually means filing a personal injury lawsuit and getting a money judgment from the court. However, collecting this money can be hard if the defendant has few assets.

A personal injury attorney helping the injured party faces big challenges in these cases. The personal injury lawyer must find the best way to help their client recover damages for their personal injury claim. They might target the car owner or look for other sources of payment.

The Dangerous Instrumentality Doctrine in Florida

Florida has a special law called the “dangerous instrumentality doctrine.” This law lets the injured person sue both the driver who caused the crash and the owner of the motor vehicle. This applies if the owner permits to use the car.

For example, if you lend your car to a friend who causes a crash, the injured person can sue both of you. Courts view a car as a dangerous tool that owners should control to prevent accidents. You could be held liable for someone else’s wrongful act in your car.

Personal injury lawsuits often target vehicle owners based on this rule. This happens especially when the driver has no insurance or money. It adds another layer to Florida auto cases from a bankruptcy attorney’s perspective.

Understanding Florida Auto Negligence Judgments

When an insurance company sues an at-fault driver and wins, it gets a judgment. This money judgment gives them the power to:

Take the driver’s wages
Freeze bank accounts
Take the debtor’s assets
Suspend the driver’s license

These judgments often reach tens or hundreds of thousands of dollars. Your license stays suspended until you pay the judgment, make a payment plan, or file bankruptcy to discharge the debt.

Auto accident debts can be eliminated through bankruptcy discharge in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. This is key for anyone struggling with such a judgment, as bankruptcy can offer major relief from these debts.

What Happens in Bankruptcy Court During Auto Negligence Cases

When your auto case meets bankruptcy, you need to understand the court process. The Bankruptcy Court is a special federal court that handles all bankruptcy filings. It works differently from regular courts.

During your bankruptcy filing, the bankruptcy judge reviews your petition. They decide if your auto negligence judgment can be discharged. Most car accident judgments qualify unless you were drunk driving or caused harm on purpose.

The process starts when your bankruptcy lawyer files your bankruptcy petition. This filing creates an automatic stay under bankruptcy law. The stay stops all collection efforts against your assets. For those facing Florida auto judgments, this means quick relief from wage garnishment and license suspension from a court order.

Is Bankruptcy the Best Option for Auto Negligence Judgments?

If you caused an accident without good insurance, talk to a local bankruptcy attorney about your options. A lawyer who knows both auto cases and bankruptcy law can help choose the best path.

Your options usually include:

Fighting a personal injury case
Working out a settlement with the injured party
Wiping out the debt through Chapter 7 bankruptcy or Chapter 13 bankruptcy with repayment plans

Besides the automatic judgment, filing for bankruptcy may help you eliminate other unsecured debt. This includes credit card debt, hospital bills, medical bills, personal loans, and car repo deficiencies. This broader approach helps fix your whole financial situation, not just the auto judgment.

How a Personal Injury Attorney Views Auto Negligence Bankruptcy Cases

From a personal injury attorney’s view, bankruptcy filings by at-fault drivers create big challenges. When a defendant files for bankruptcy during a personal injury suit, getting paid becomes much harder.

Personal injury attorneys must quickly file a claim in bankruptcy court to protect their client’s rights. They may file a special proceeding if they believe the debt should not be discharged due to how the injury was caused.

Many personal injury attorneys work with bankruptcy attorneys to help their clients get personal injury recoveries. They might negotiate partial payment, pursue claims against insurance policies, or look for other liable parties with assets.

Case Study: When A Bankruptcy Attorney Fought an Insurance Company and Won

The protections from the bankruptcy code are strong and nearly absolute. As experienced Florida bankruptcy lawyers, we make sure your rights stay protected during and after your case.

We once represented a client who GEICO sued after an accident. Our client was at fault and had poor coverage. After reviewing his personal injury case and finances, we decided Chapter 7 bankruptcy was his best option.

After filing, our client received a bankruptcy discharge from the bankruptcy court. However, GEICO’s attorneys kept trying to collect. They ignored bankruptcy law. They even got a judgment and suspended his license. This happened despite the debt being properly discharged. We sued GEICO and its lawyers and won a significant judgment for our client.

The Role of the Supreme Court in Shaping Bankruptcy Debt Relief

The Supreme Court has made key decisions about how auto negligence judgments work in bankruptcy. These rulings guide how bankruptcy attorneys handle these cases.

In one major case, the court ruled that only debts from deliberate acts to cause injury cannot be discharged. This means most regular car accident judgments can be discharged unless they involve drunk driving.

Another important ruling made clear that creditors have no such right to pursue the collection of discharged debts. This applies even if state law might allow it. Once your auto judgment is discharged, the insurance company has not such right to keep pursuing you for payment.

How Bankruptcy Affects Personal Injury Claims

The relationship between bankruptcy and personal injury claims is complex. Here are the key points:

For injured parties: If you get or expect a personal injury settlement and file for bankruptcy, that money may become part of your bankruptcy estate. Florida law does provide exemptions that may protect some of your personal injury recoveries.

For at-fault drivers: If you face a personal injury lawsuit or judgment, bankruptcy can usually discharge your liability. In some cases, like drunk driving, it may not be dischargeable.

Timing matters: The bankruptcy court pays close attention to when settlements happen compared to when you file for bankruptcy protection.

What Makes a Debt Nondischargeable in Auto Negligence Cases

Most auto negligence judgments can be discharged in bankruptcy. But some situations make a debt nondischargeable. You need to know these exceptions when thinking about bankruptcy.

The most common exception is for debts from drunk driving. If the injury was caused by driving while intoxicated, the debt cannot be discharged in any bankruptcy.

Another exception involves willful and malicious injury to a person or their property. This means more than simple carelessness. There must be intent to harm or reckless disregard for the likely results of your actions.

The Role of Insurance Policies in Auto Negligence Cases

Your insurance policy plays a key role in auto negligence cases. Many Florida drivers don’t know these important facts:

Minimum required insurance doesn’t include bodily injury coverage
Policy limits are often too low for serious accidents
Uninsured motorist coverage is optional but very valuable

Insurance companies must defend their policyholders up to policy limits. When damages go beyond these limits, you may be personally responsible for the difference. This is when many people think about bankruptcy.

When a defendant files for bankruptcy during a personal injury lawsuit, it triggers a specific legal process. The automatic stay immediately stops all lawsuit activity. No depositions, hearings, or trials can continue without the bankruptcy court’s permission.

How Auto Negligence Lawsuits Progress

When someone files a personal injury lawsuit after a car accident, several steps typically happen:

The plaintiff files a complaint claiming negligence
The defendant files an answer or tries to dismiss the case
Both sides share information through the discovery
They may try to settle the case
If they can’t agree, the case goes to trial
If the plaintiff wins, the court issues a judgment
Collection efforts begin if the judgment isn’t paid

At any point, if the defendant files for bankruptcy, the automatic stay stops the lawsuit temporarily. The bankruptcy judge will then decide if the debt can be discharged.

Choosing Between Chapter 7 and Chapter 13 Bankruptcy

When dealing with auto negligence judgments, a person files for bankruptcy to find relief from overwhelming debts. There are two main bankruptcy options to pay creditors: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy: This is called “liquidation” bankruptcy. In this process, several actions take place to handle your debts. Some non-exempt assets may be sold to pay creditors. However, most people get to keep all their property. The entire judgment debt is usually wiped out in about 3-4 months. This means the injury caused by the accident and resulting debts can be discharged quickly. Chapter 7 is often the best choice if you have a low income and few assets.

Chapter 13 Bankruptcy: This option involves repayment plans lasting 3-5 years. You pay back part of your debts based on your income and expenses. The court issues a payment plan that sets how much you must pay each month. This allows you to keep your property while paying off the injury caused debts over time. Chapter 13 is better if you have a regular income and want to protect your assets.

Your choice depends on your income, assets, and personal situation. A bankruptcy attorney can guide you through these options and help you pick the right chapter for your case.

Special Considerations for Married Couples in Bankruptcy

Married couples facing auto negligence judgments have special issues to consider. If only one spouse was driving, you might have options to protect the other spouse’s assets and credit.

In some cases, only the spouse who was driving needs to file for bankruptcy. This approach can save the other spouse’s credit score. However, in Florida, marital property might still be at risk, depending on how it’s titled.

For married couples with joint debts beyond the auto judgment, filing together might make more sense. This lets you address all financial issues at once. We carefully analyze each situation to recommend the best approach.

How Medical Expenses Factor Into Bankruptcy Decisions

Medical expenses play a big role in bankruptcy decisions after auto accidents. For injured parties, overwhelming medical bills often drive the need for bankruptcy protection. These bills can quickly exceed insurance coverage, especially with serious injuries.

For at-fault drivers, the injured party’s medical expenses form a large part of any judgment against them. Medical bills, including those from auto accidents, are generally unsecured debts that can be discharged in bankruptcy.

In Chapter 13 bankruptcy, medical expenses are typically classified as nonpriority unsecured debts. This means they get paid only after secured and priority debts are secured and priority debts are secured in your repayment plan. Often, unsecured creditors receive only a small percentage of what they’re owed.

Contact Our Florida Bankruptcy Attorney for a Free Case Consultation

If you have questions about auto negligence defense, personal injury settlement options, or bankruptcy, contact our office to speak with a local bankruptcy attorney. We’ve been helping Florida clients get debt relief since 2010.

As experienced bankruptcy lawyers, we can help you understand your options for dealing with personal injury lawsuits and judgments. We’ve filed thousands of bankruptcy cases and would be happy to see if bankruptcy relief is right for you.

Our attorney-client relationship begins with a free consultation where we’ll review your specific situation. We’ll explain how bankruptcy law applies to your case and what property you can protect through exemptions.

Don’t let an auto negligence judgment ruin your financial future. With the right legal strategy, you can solve these problems and move forward. Contact us today to learn how we can help you traverse these tough legal waters.

Navigating Debt After a Federal Layoff: What You Need to Know

Posted on March 9, 2025March 7, 2025 by Emil Fleysher

Hi, I’m Emil Fleysher, a Florida bankruptcy attorney and the owner of Fleysher Law, PA. If you’ve recently been affected by the wave of federal layoffs, you’re not alone. Losing your job can be overwhelming—especially when you have financial obligations to meet. The good news is that there are steps you can take to protect yourself, your assets, and your financial future.

Let’s talk about how to manage your debt during this transition and why bankruptcy may be a powerful tool for getting back on your feet.

Step One: Assess Your Financial Situation

The first thing you’ll want to do is take a hard look at your finances. Create a budget based on your new income—whether that’s severance, unemployment benefits, or savings. Prioritize essential expenses like rent or mortgage payments, utilities, and groceries. If you have significant credit card debt, loans, or medical bills, now is the time to start planning how to handle them.

Step Two: Avoid Common Mistakes

When facing financial uncertainty, people often make decisions that hurt them down the road. Here are a few things to watch out for:

Dipping into retirement savings: Your 401(k) and IRA are usually protected in bankruptcy, meaning creditors can’t touch them. Don’t drain your retirement fund just to stay afloat temporarily.
Taking out high-interest loans: Payday loans and cash advances may seem like a quick fix, but they can lead to a cycle of debt that’s difficult to escape.
Transferring assets to friends or family: If you transfer money or property right before filing for bankruptcy, the court may see it as an attempt to hide assets and reverse the transfer.

When Bankruptcy Makes Sense

Many people avoid considering bankruptcy because of misconceptions or stigma. However, bankruptcy is a legal tool designed to give honest, hardworking people a fresh start. If you’re struggling to keep up with debts and your job loss has put you in financial jeopardy, bankruptcy may be a smart move.

Chapter 7 Bankruptcy: If your income has dropped significantly, you may qualify for Chapter 7, which wipes out most unsecured debts like credit cards, personal loans, and medical bills. Timing is crucial—if you’re unemployed now but expect to find work soon, filing while your income is low may help you qualify.
Chapter 13 Bankruptcy: If you still have some income and want to keep assets like your home or car, Chapter 13 allows you to restructure your debts into an affordable repayment plan over three to five years.

Timing Considerations for Filing Bankruptcy

If you’re considering bankruptcy, timing is everything. Here’s what you need to keep in mind:

Income Matters: If you expect to find a new job soon, your current lower income may help you qualify for Chapter 7 before your earnings increase again.
Recent Transfers or Large Purchases: If you’ve recently transferred money or made big purchases, it may be better to wait before filing to avoid issues with the bankruptcy trustee.
Tax Refunds & Windfalls: If you’re expecting a tax refund or severance package, planning your bankruptcy timing can help you keep those funds rather than having them used to pay creditors.

Contact Our Florida Bankruptcy Attorney for a Free Case Consultation

Losing a job is stressful, but it doesn’t have to define your future. At Fleysher Law, PA, I’ve helped thousands of people in Florida eliminate debt and rebuild their financial lives. If you’re feeling overwhelmed by debt after a layoff, I’m here to guide you through your options and help you make the best decision for your situation.Call me today for a free consultation, and let’s get you back on track to financial stability.

Keep on Trucking: Overcoming the Financial Challenges of the Trucking and Logistics Downturn

Posted on March 8, 2025March 7, 2025 by Emil Fleysher

Hi, I’m Emil Fleysher, a Florida bankruptcy attorney and the owner of Fleysher Law, PA. If you’re a truck driver or work in the logistics industry, you’ve probably felt the financial strain that has hit the industry in the last few years. After the COVID-19 boom, freight rates dropped, fuel costs skyrocketed, and many owner-operators have struggled to keep up with loan payments, equipment costs, and day-to-day expenses. If you’re feeling the pressure, you’re not alone.

The good news? There are options available to help you get through tough times and back on the road to financial stability.

[ez-toc]

Step One: Assess Your Financial Situation

The first thing to do is take a close look at your finances. Whether you’re an owner-operator or a company driver, understanding your income, expenses, and outstanding debts is crucial. Prioritize essential expenses like your mortgage, truck payments, insurance, and food. If credit card debt, personal loans, or unpaid taxes are piling up, now is the time to evaluate your options.

Step Two: Avoid Common Mistakes

Financial hardship can lead to snap decisions that cause more harm than good. Here are some key mistakes to avoid:

Draining retirement savings: Your 401(k) and IRA are protected in bankruptcy, meaning creditors can’t take them. Don’t empty your retirement accounts to stay afloat temporarily.
Using high-interest credit or payday loans: Short-term loans with high interest can trap you in a cycle of debt that’s hard to escape.
Delaying action: Many truck drivers wait too long before seeking help, hoping the market will improve. Addressing your debt now can prevent bigger problems down the road.

When Bankruptcy Makes Sense for Truck Drivers

If you’ve exhausted your options and still find yourself buried in debt, bankruptcy may be a solution. Many truck drivers hesitate because of common misconceptions, but bankruptcy is a legal tool designed to help hardworking people get a fresh start.

Chapter 7 Bankruptcy: If your income has dropped and you’re struggling with unsecured debts like credit cards and medical bills, Chapter 7 may wipe them out completely. This is ideal for drivers who have minimal assets outside of necessary tools and vehicles.
Chapter 13 Bankruptcy: If you want to keep your truck and restructure your debt, Chapter 13 allows you to create an affordable repayment plan over three to five years. This is often a great option for owner-operators who need to catch up on payments without losing their rig.

Timing Considerations for Filing Bankruptcy

Truck drivers need to consider a few important factors when filing for bankruptcy:

Fluctuating Income: If your income varies due to load availability, filing when your earnings are lower could help you qualify for Chapter 7.
Asset Protection: If you own your truck outright or have valuable assets, planning your bankruptcy filing carefully can help protect them.
Recent Purchases or Transfers: If you’ve recently bought equipment, transferred money, or refinanced loans, these transactions could impact your bankruptcy case.

Let Our Florida Bankruptcy Attorney Help You

If you’re a truck driver struggling with debt, you don’t have to go it alone. At Fleysher Law, PA, I’ve helped thousands of hardworking people find relief from overwhelming financial burdens. Bankruptcy is not a failure—it’s a tool that can give you a second chance.
Call me today for a free consultation, and let’s talk about your options. Together, we’ll find the best path to get you back on the road—without the weight of unmanageable debt holding you back.

List of Dischargeable Debts

Posted on August 16, 2024November 13, 2024 by Emil Fleysher

When you file for bankruptcy, certain debts can be wiped out, which means you no longer have to pay them. This process is known as “discharge.” Understanding which debts can be discharged is essential because it affects your financial recovery.

Bankruptcy can provide a fresh start by freeing you from overwhelming debts. At Fleysher Law, we can review your outstanding debts and see if bankruptcy relief is right for you.

The types of debts that can be discharged depend on the bankruptcy chapter under which you file. Not all debts are dischargeable, and the rules can be complex.

Knowing which debts can be cleared can help you plan better and make informed decisions about filing for bankruptcy. Working with a knowledgeable bankruptcy lawyer is vital to navigating these waters efficiently.

What Is a Dischargeable Debt?

A dischargeable debt is a debt that the bankruptcy court allows you to eliminate when you file for bankruptcy. Once a debt is discharged, you are no longer legally required to pay it, and the creditor cannot attempt to collect it from you. This fundamental aspect of bankruptcy law helps individuals and businesses recover from financial distress.

Dischargeable debts often include those that have become too difficult to manage, like credit card debt or medical bills. The purpose of discharging debts is to give debtors a new financial beginning, free from the pressures of unmanageable debts.

Purpose of Debt Discharge

The main goal of discharging debts in bankruptcy is to provide relief to financially overwhelmed individuals. Debt discharge ensures that financial mistakes or unfortunate circumstances do not permanently cripple debtors. It allows them to reset their financial status and work towards a more stable future.

Debt discharge also helps to stabilize the economy by allowing consumers to participate again in the market. By clearing debts, individuals can eventually return to being active economic participants, purchasing goods, and improving their living standards without the heavy burden of past debts.

Why You Must Know Which Debts Are Dischargeable

Knowing which debts can be discharged is essential for effective financial planning. Knowing what can be wiped out if you are considering bankruptcy helps you evaluate whether it is the right option. It can also influence your decision on when or whether to file and what chapter of bankruptcy to choose.

Identifying dischargeable debts can also prevent surprises during the bankruptcy process. Being informed helps you set realistic expectations about the outcome of your bankruptcy case. This knowledge is vital for preparing mentally and financially for the changes that will occur.

Types of Dischargeable Debts in Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, you can eliminate most of your unsecured debts. Here’s a closer look at what types of debts are usually dischargeable:

Credit Card Debt

Credit card debt is one of the most common types of debt discharged in Chapter 7 bankruptcy. When you can’t keep up with the payments, discharging this debt can relieve a huge financial burden. This type of discharge allows you to eliminate the amounts owed without paying them back in full. We can examine your credit card debt to see if we can discharge it.

Medical Bills

Medical bills can accumulate quickly, especially without insurance, and are fully dischargeable in Chapter 7. Many people face financial trouble due to unexpected medical expenses, and discharging these bills can prevent them from spiraling into a deeper financial crisis. This relief is indispensable for individuals who have incurred substantial medical debts due to illnesses or emergencies.

Personal Loans

Unsecured personal loans from friends, family, or financial institutions can also be discharged in Chapter 7. These loans do not have any collateral attached, like a car or house. Discharging these debts can highly reduce your total debt load and alleviate stress.

Utility Bills

Past-due utility bills, such as electricity, gas, or water, can be discharged in Chapter 7. This can be particularly helpful if you’re trying to catch up on bills and avoid service interruptions. Once these debts are discharged, you can start fresh with your utility providers.

Collection Agency Accounts

Debts sold to collection agencies are often dischargeable. These might include old credit card debts, medical bills, and other unsecured debts. Discharging these can stop harassing calls and letters and give you peace of mind.

Types of Dischargeable Debts in Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows you to reorganize and pay off debts over time. Here’s what you can generally discharge:

Unsecured Debts

After a Chapter 13 repayment plan, unsecured debts—those without collateral—can frequently be fully or partially discharged. This includes debts like credit card balances, medical bills, and personal loans.

Certain Tax Debts

Some older tax debts can be discharged under Chapter 13 if they meet specific criteria, such as being due for at least three years. This can provide substantial relief if you owe back taxes you cannot pay.

Debts from Lease or Contract

Debts arising from leases or contracts, such as unpaid rent or car leases, can sometimes be discharged. This can allow you to walk away from burdensome, no longer affordable contracts.

Business Debts

Debts incurred strictly for business purposes, separate from personal expenses, can be discharged. This is helpful for small business owners who have accumulated debts solely related to their business operations.

Debts That May Be Dischargeable, Depending on Circumstances

Some debts may be discharged depending on specific conditions.

Student Loans (in Cases of Undue Hardship)

Student loans are generally not dischargeable, but they can be in rare cases of undue hardship. This means proving that paying the loan would prevent you from maintaining a minimal standard of living.

Tax Debts Older than Three Years

Tax debts older than three years might be dischargeable if they meet certain conditions, like having been assessed by the IRS more than 240 days before filing for bankruptcy.

Court Judgments

Certain court judgments, except those related to fraud or criminal activities, can be discharged. This can include judgments from civil court cases like personal injury or breach of contract.

Divorce-Related Debts (Not Alimony or Child Support)

While alimony and child support are not dischargeable, other divorce-related debts, such as those assigned in a property settlement, might be. This can ease financial obligations following a divorce.

Non-Dischargeable Debts

Some debts cannot be eliminated through bankruptcy. These include alimony and child support, certain taxes and fines, and debts incurred through fraud. Knowing which debts cannot be discharged is as important as knowing which can be.

Familiarity with both types of debts gives you a clear picture of your financial situation post-bankruptcy. This knowledge can help you plan for a more secure financial future without unrealistic expectations.

Process for Discharging Debts

Consult a bankruptcy lawyer: Meet with a lawyer to discuss your financial situation and decide if bankruptcy is right for you.
Gather financial documents: You must collect all relevant financial documents, including debts, income, and assets, for your bankruptcy filing.
File bankruptcy petition: Your lawyer will help you file a petition with the bankruptcy court. This officially starts your bankruptcy case.
Attend credit counseling: You must attend credit counseling from an approved agency. This is a requirement before your debts can be discharged.
Review by bankruptcy trustee: A trustee will review your case and oversee any asset liquidation under Chapter 7 or a repayment plan under Chapter 13.
Attend the 341 meeting: The creditors’ meeting is where creditors can contest the discharge of your debts.
Receive discharge: After completing all steps and adhering to the repayment plan in Chapter 13 or liquidation in Chapter 7, you will receive a discharge notice for qualifying debts.

How Fleysher Law Can Help with Debt Discharge

Expert guidance: Our experienced bankruptcy lawyers can help you determine whether filing for bankruptcy is your best option and what debts can be discharged.
Customized solutions: We tailor bankruptcy solutions to your unique financial situation, ensuring the best possible outcome.
Detailed preparation: We help you gather and prepare all necessary documentation to support your bankruptcy filing, ensuring accuracy and completeness.
Representation in court: Our lawyers represent you in all court proceedings, advocating on your behalf and ensuring your rights are protected. We fight to maximize your discharged debt and secure the relief you need.
Post-bankruptcy advice: After your bankruptcy, we offer advice on rebuilding your credit and managing your finances to avoid future financial troubles. We put the needs of our clients first.

Call Our Florida Bankruptcy Lawyer for a Free Case Consultation

If you’re struggling with debt, don’t wait to get help. Fleysher Law offers a free consultation to help you get started. Knowing the difference between dischargeable and nondischargeable debts is critical for relief.

If we can maximize your dischargeable debts and reduce your debts owed, including tax debt, we can help you secure a fresh financial start.

How Does Stress from Debt Affect Your Health?

Posted on July 16, 2024November 13, 2024 by Emil Fleysher

In today’s fast-paced world, the burden of debt can take a significant toll on your overall well-being, affecting both your mental and physical health. From sleepless nights to constant worry, the stress of unmanageable debt can feel overwhelming. However, there’s a solution that can provide much-needed relief: bankruptcy. In this article, we’ll explore how stress from debt can impact your health and why bankruptcy may be just what the doctor ordered.

At Fleysher Law, we understand how debt can create stress and have a negative impact on your health. It is important to take a comprehensive approach to stress management, and that means addressing both the financial and health-related issues that can develop. Thai article will cover some general facts and information so if you need more specific advice, feel free to reach out to us to schedule a complimentary consultation.

1. Mental Health Struggles

The constant pressure of debt can lead to myriad mental health challenges, including anxiety, depression, and chronic stress. The relentless worry about overdue bills, mounting interest, and creditor calls can consume your thoughts and impact your ability to enjoy life. Over time, these mental health issues can become more severe, leading to long-term psychological effects that might require professional intervention. The feeling of being trapped by financial obligations can also erode your self-esteem and leave you feeling not in control of your own life.

2. Physical Health Complications

Stress from debt doesn’t just affect your mind—it can also manifest physically, resulting in headaches, stomach issues, insomnia, and even cardiovascular problems. The toll of financial strain on your body can weaken your immune system, making you more susceptible to illness. Chronic stress increases the risk of developing hypertension and heart disease, emphasizing the need for effective stress management strategies. Regular physical symptoms serve as constant reminders of financial worries, perpetuating a cycle of stress.

3. Strained Relationships

Financial stress can strain relationships with loved ones, leading to arguments, tension, and feelings of isolation. The burden of debt can cause friction with partners, family members, and friends, creating a rift that further compounds your stress. As relationships deteriorate, the support system that is crucial during tough times may begin to crumble, leaving individuals feeling even more isolated and unsupported. This lack of support can make coping with debt even more challenging and distressing.

4. Impact on Productivity

The distraction of debt can impair your ability to focus, concentrate, and perform effectively at work or in other areas of life. Reduced productivity and performance can hinder your career advancement and personal growth, adding to your stress. The cyclical effect of reduced productivity may lead to job insecurity or loss, further exacerbating financial stress. It’s crucial to find ways to manage debt-related stress to maintain professional performance and personal satisfaction.

5. Coping Mechanisms and Unhealthy Behaviors

In an attempt to cope with stress, individuals may turn to unhealthy behaviors such as overeating, substance abuse, or excessive spending. These behaviors can further exacerbate health problems and perpetuate the cycle of debt and stress. Unfortunately, such coping strategies often provide only temporary relief and can lead to additional physical and mental health issues. Recognizing these patterns is the first step toward adopting healthier stress management techniques.

Tips for Stress Management

Identify the sources of your stress to tackle them more effectively. Understanding what aspects of your debt cause the most stress can help you formulate a plan to address them.
Develop a budget to regain control over your finances. A well-organized approach to spending and saving can reduce the anxiety associated with debt.
Prioritize physical activity in your daily routine. Exercise is a proven stress reliever and can improve both your physical and mental health.
Communicate openly with loved ones about your financial and emotional state. Sharing your burdens can lighten your load and help you find support.
Practice mindfulness or meditation. These techniques can help you maintain a level of calm and manage stress more effectively.
Seek professional advice for debt management. Financial advisors or credit counselors can offer strategies and resources to manage debt more effectively.
Establish a routine that includes ample time for rest and relaxation. Adequate sleep and downtime are essential for mental and physical health.

The Dangers of Ignoring Stress

Ignoring the stress that comes with debt can lead to severe consequences for both mental and physical health. Over time, unaddressed stress can escalate into more serious conditions, such as major depressive disorder or generalized anxiety disorder. The physiological effects of chronic stress can also degrade one’s health over time, leading to chronic illnesses that could have been prevented with earlier stress management interventions. It is crucial to acknowledge stress and take proactive steps to manage it before it becomes overwhelming.

How a Mental Health Professional Can Help You

Consulting with a mental health professional can provide you with tools and techniques to manage stress effectively. Therapists can help you understand the emotional responses to debt and develop healthier coping mechanisms that do not exacerbate the situation. Through therapy, you can learn to set realistic goals and expectations, which is crucial for long-term stress management and financial health. A professional can also offer support and guidance that might be lacking in your personal life, providing a safe space to express feelings and fears about debt.

Fleysher Law Is Here To Support You: Schedule a Free Consultation

It’s essential to recognize the signs of stress related to debt and take proactive steps to address it. Seeking support from a qualified bankruptcy attorney can provide relief and guidance in addressing the issues related to debt management and financial restructuring. A bankruptcy attorney can offer solutions tailored to your unique circumstances, including debt consolidation, negotiation with creditors, or bankruptcy filing if necessary.

At Fleysher Law, we are proud to be the trusted Florida bankruptcy attorneys for so many people suffering from stress and other unhealthy side-effects of overwhelming debt. Contact us today to schedule a free case review, and let us help you get your financial stress in order.

Discharging Tax Debt in Bankruptcy

Posted on April 27, 2023October 26, 2023 by Emil Fleysher

Are you feeling stressed out about the IRS tax debt? Have you considered discharging that tax debt in bankruptcy? Did you know that was even possible? Keep reading to learn the facts about discharging tax debt in bankruptcy.

Before making a major financial decision like filing for bankruptcy, make sure you speak with an experienced bankruptcy lawyer who can explain how the bankruptcy system works and will help you navigate your way to a debt-free fresh start.

Does Bankruptcy Discharge Tax Debt?

If you have tax debts and cannot repay them, declaring bankruptcy may be an option. But does bankruptcy clear tax debt? Tax debt can be discharged in bankruptcy, but only under certain circumstances. If your tax debt is at least 3 years old and stems from a 1040 income tax return you filed with the IRS at least 2 years before filing bankruptcy, it may be discharged in bankruptcy.

As long as no fraud or misconduct led up to the tax debt assessment, you should be able to utilize bankruptcy to discharge and free yourself of the tax burden. Even non-dischargeable tax debt can be restructured in Ch. 13 bankruptcy.

Because bankruptcy has long-term financial and legal consequences, the US Bankruptcy Court strongly advises seeking the advice of a qualified attorney, even though it is possible to file for bankruptcy without one.

If you find yourself in a situation where paying off your tax debts may be impossible, enlisting the assistance of an experienced tax debt attorney can help you get back on track financially.

What Are the Types of Personal Bankruptcies?

Considering bankruptcy filing, you may wonder what personal bankruptcies are available. First, it’s important to note that there are two types of personal bankruptcy: liquidation bankruptcy and reorganization bankruptcy.

Chapter 7: Liquidation

Chapter 7 bankruptcy, also known as the liquidation or straight bankruptcy. It is a process in which you can ask a bankruptcy court to discharge most of your debts and begin again. A judge will hear your case and decide whether or not to grant your request.

If the petition is approved, the court imposes an “automatic temporary stay,” which prevents creditors from attempting to collect payments or taking actions such as wage garnishment, repossession, or foreclosure while the bankruptcy case is pending.

People in serious debt can file for Chapter 7 bankruptcy immediately, but some drawbacks exist.

Filing bankruptcy negatively impacts your credit score, and you may lose certain nonexempt assets that are sold or “liquidated” to repay your creditors. Most assets, however, are exempt and are not subject to liquidation.

The liquidation procedure generally consists of three steps:

Your nonexempt assets have been sold (if you have any).
The proceeds from the property sale are distributed to your creditors and lenders.
You are free of most remaining unsecured debts and can begin again.

Remember that student loans, tax debt, and other types of secured debt are not “dischargeable,” You must repay them unless you demonstrate extraordinary circumstances. However, most consumer debt, such as medical bills and credit card debt, is dischargeable.

Chapter 13: Reorganization

A Chapter 13 bankruptcy is a reorganization bankruptcy. It contrasts with Chapter 7 bankruptcy or liquidation bankruptcy.

In a Chapter 7 bankruptcy, you must surrender any nonexempt property in exchange for the majority of your debts being discharged.

Unlike the liquidation process, you will not be required to surrender any property during a Chapter 13 bankruptcy. Instead, it would help if you create a structured repayment plan outlining how you intend to use your income to pay off your debts for three to five years.

What Is the Difference Between Secured and Unsecured Debt During Bankruptcy?

Whether you’re thinking about filing for bankruptcy or are already in the process, there is one thing you want to be sure of. Ask yourself if you have secured or unsecured debt.

Read on to learn the difference between secured and unsecured debt during bankruptcy.

Secured Debt in Bankruptcy

This obligation is secured by so-called “collateral.” The debt contract grants the lender a “lien” on the collateral or ownership interest. The lien will remain in effect until the loan gets repaid. The lien rights allow the lender to recover the property if the borrower defaults.

The following are some examples of secured debt.

A homebuyer agrees to use their home as collateral for a loan.
A car loan with a clause that gives the lender the right to repossess the vehicle if the borrower fails to pay.
A commercial loan in which the company’s assets serve as collateral.
You owe a secured debt if a creditor has a lien on your property. A secured claim exists for the creditor.

Unsecured Debt in Bankruptcy

These debts are not collateralized. Unsecured debt includes credit card balances, medical bills, personal loans, utility balances, gym memberships, and other similar items.

The creditor cannot recover the purchased product or service if you do not pay. Instead, the creditor must go to court to determine the amount owed. A judgment creditor, or someone who has won a collection lawsuit, can use the judgment to garnish wages, seize property, and levy bank accounts.

Whether your debt gets discharged or a creditor gets paid determines whether it will be classified as a priority or nonpriority unsecured debt.

When Can Taxes Be Discharged in Bankruptcy?

The type of tax, the age of the tax debt, whether you filed a return, and the type of bankruptcy all influence whether you can discharge tax debt. If you meet all of the following conditions, your federal income taxes in Chapter 7 are dischargeable:

The tax debt is for income taxes. Sales tax, payroll tax, and penalties related to fraud are not dischargeable.
You did not engage in willful evasion or fraud. Bankruptcy will not help if you filed a fraudulent tax return or willfully attempted to avoid paying taxes, such as using a false Social Security number on your tax return.
The debt dates back at least three years. The tax return must have come due at least three years before the bankruptcy filing.
You filed a tax return. You would be in the best position if you filed on time. According to federal bankruptcy law, you must have filed your tax return at least two years before filing for bankruptcy. This is the current rule in Florida. Some states, however, require that you file your return on time. Depending on where you file bankruptcy, it may not count if you never filed and the IRS filed a return on your behalf.
You have fulfilled the 240-day rule. The IRS must have assessed your income tax debt at least 240 days before filing your bankruptcy petition, or it will not be dischargeable. The limit may get extended if the IRS suspends or “tolls” collection activity due to an offer in compromise or a previous bankruptcy filing.

Even if you meet these requirements, filing a tax lien by the IRS can complicate the situation. If you owe the IRS a significant amount of money that could be discharged in bankruptcy, you should file your bankruptcy case as soon as possible to avoid having the IRS file a tax lien against you.

Can You Discharge a Federal Tax Lien?

A tax lien is a legal claim against your property, whereas a tax debt is a money owed to the taxing authorities. The lien can be placed on your assets, including bank accounts, personal belongings, vehicles, and real estate.

Whether and to what extent a tax lien is discharged in bankruptcy depends in part on the assets you have when filing the bankruptcy case. The tax lien creates a security interest in your assets and belongings. That turns all of your property into collateral for the tax lien.

However, if your property is limited to exempt items or of nominal value, the tax debt discharge will effectively discharge the tax lien along with it. If you have significant nonexempt assets, the lien will remain and survive the bankruptcy to the extent of the value of the unexempt collateral.

In any event, once you file for bankruptcy, the IRS cannot continue to try to collect on a dischargeable tax debt, even if a lien is in place. Your bank account or wages cannot be tapped to collect on the tax debt. You can continue to live in a house with a tax lien. However, the tax lien must be paid off at closing if you sell or refinance your home.

Should You File Bankruptcy Before or After Filing Taxes?

An experienced bankruptcy lawyer will tell you that in bankruptcy, timing is everything. However, with very rare exceptions, there is no benefit to delaying the filing of your returns. Even if you know there will be a significant tax debt owed, the sooner you file the return, the sooner it can be dischargeable. Before filing your bankruptcy case, you must have filed all required tax returns in the last 4 years.

Generally, some factors make it more crucial to keep your tax filings current if you consider declaring Chapter 7 or Chapter 13 bankruptcy.

What Happens To Tax Debt When You File for Bankruptcy?

When you learn that you’ll need to file for bankruptcy, one of the first questions you might have is what will happen to your tax debt. Here’s what happens to tax debt when you file for bankruptcy.

Tax Debt in Chapter 13 Bankruptcy

Your tax debt will be included if you file for Chapter 13 bankruptcy and the court trustee arranges a partial repayment plan. If it meets the five criteria outlined above, it is classified as a “nonpriority debt.”

It means that it will be treated similarly to credit cards and other debts that are typically easy to discharge. Instead of repaying the entire amount, the court will determine how much you can repay. In your payment plan, you will repay some of the debt owed to you, the IRS, or your state tax office. The remaining balances will then be discharged.

If your tax debt does not meet those five criteria, it may classify as a “priority debt.” You can still pay it off through your repayment plan. It must, however, be repaid in full.

One major difference between Chapter 13 and Chapter 7 regarding tax debt is that in Chapter 13, the IRS is required to file a “Proof of Claim” that itemizes all of the tax debt owed. In this Proof of Claim, the IRS will label the status of each itemized debt according to their computerized records. This is extremely helpful because it puts on record the exact amounts of tax debt that are and are not dischargeable in the bankruptcy case. This Proof of Claim is not filed in Chapter 7 cases, so there is not as much clarity as to the actual nature and dischargeability of the tax debt.

Tax Debt in Chapter 7 Bankruptcy

Chapter 7, also known as “liquidation bankruptcy,” is less complicated. Your tax debt may get discharged if you meet the five criteria above. The discharge will also include any penalties and interest incurred due to the debt.

The tax debt and associated penalties will only be discharged if they meet those criteria. Although you still owe those taxes, you can still declare bankruptcy and have your other debts discharged.

How Will Bankruptcy Affect Future Tax Filings and Refunds?

Most people know that, unlike future filings, a tax refund due in the year they file for Chapter 7 bankruptcy becomes an asset of the “bankruptcy estate” and may be used to settle debts by a trustee.

The trustee can keep tax refunds each year of the prepayment plan under Chapter 13. It can only happen once in Chapter 7.

In a Chapter 7 filing, proper use of exemptions and timing of the bankruptcy filing petition can help you keep some of your tax refunds. It is best to seek professional assistance with tax refunds following the bankruptcy.

Contact Fleysher Law Today for an Initial Consultation.

Contact fleysher law for initial consultation

Filing bankruptcy is not a decision that should be taken lightly. Most people who consider bankruptcy have become overwhelmed by their financial situation and may even feel they have nowhere else to turn.

At Fleysher Law, we understand how difficult these moments can be. Our experienced bankruptcy lawyer ensures that you and your family fully understand this process’s ramifications so there are no surprises.

We provide a safe place for you to discuss your options and decide how best to proceed before submitting your petition in court.

Call (888) 886-0020 now to schedule an initial consultation with our attorneys and discover the right strategy for dealing with your tax debt in bankruptcy!

Types Of Debt Covered By Bankruptcy Protection

Posted on February 24, 2022February 22, 2023 by Emil Fleysher

When you file for bankruptcy, you might assume that bankruptcy protection will discharge all of your debts. However, this is not the case for all as bankruptcy cannot completely discharge some debts because they do not qualify. In general, bankruptcy is a complex process. And, while you may think you can get through it on your own, you should enlist the help of a bankruptcy attorney who can guide you through the process and make sure you are getting the best possible outcome. Most commonly, debtors file Chapter 7 Bankruptcy to clear their debt when they have little to no assets and don’t have a large income. A Chapter 13 Bankruptcy filing allows the debtor to propose a payment plan to consolidate and repay their debt.
Here, we discuss some common types of debt and whether bankruptcy protection covers them.

Credit Card Debt

In most cases, filing Chapter 7 Bankruptcy can wipe credit card debt. Upon filing for bankruptcy, you will have an obligation to surrender your credit cards to your court-appointed trustee. You will be able to file for a new secured credit card during the bankruptcy process. However, you will be responsible for paying any debt you incur with the new credit card. Beware of the temptation to run up your balances just before filing for bankruptcy as this can be viewed as fraud and will have consequences.

Unpaid Medical Bills

Medical bills are considered non-priority debts and can be discharged during bankruptcy. They are unsecured debt and filing for Chapter 7 Bankruptcy can eliminate almost all of these debts. You may have used credit cards to pay for some of these medical bills. This means that bankruptcy protection will also cover those credit cards. There is no specific dollar amount limit that can be discharged for medical bills, and there typically will not be a payment plan.

Student Loan Debt

Although student loans are treated as non-priority unsecured debts like medical bills and credit cards, it can be challenging to have them discharged. You must be able to prove that repaying places an undue hardship on your life. If you are looking to get these debts discharged, you need to discuss your options with your bankruptcy attorney.

Mortgage

Your mortgage cannot be discharged and you will need to continue to make payments throughout the bankruptcy process. If you stop making payments with the impression that your bankruptcy will protect your home, you are mistaken. Your lender can and will take legal action against you which might lead to foreclosure. However, if you fall behind on your mortgage before the bankruptcy filing or even during the Ch. 13 plan, you may be able to include your mortgage arrearage in your plan and catch up over up to 60 months. Further, if you have a Home Equity Line of Credit (HELOC) or 2^nd mortgage that is fully unsecured (meaning the property is worth less than the balance of the senior/1^st mortgage), then you can strip the HELOC off in Chapter 13 bankruptcy.

What Types of Debt Are Not Protected?

Chapter 7 or Chapter 13 Bankruptcy cannot discharge some debts. Sales Tax, Payroll Tax, and Excise Tax are non-dischargeable. However, income tax older than 3 years may be dischargeable. Child support, alimony, and other domestic support obligations cannot be discharged. Student loans discharge ability is currently possible but it can be difficult and expensive to establish and prove to the court that your hardship meets the high standard applied by most courts today. At the time of writing this article, there is a great deal of legislation and political pressure to modify this unfair standard. Also, criminal restitution, civil restitution or DUI damages, and civil judgments for fraud are also not dischargeable.

Call The Law Offices Of Emil Fleysher Today

Now that you know more about different types of debt, you also know what your next step is!

When debts become insurmountable, and there is no end in sight, you may need to consider your options for bankruptcy. Contact the Law Offices of Emil Fleysher, P.A., at 888-886-0020 to get started. We will be able to find the best financial solution for your needs and guide you through the bankruptcy process. Our dedicated staff is here to help you get a fresh financial start.

How To Rebuild Your Credit After A Foreclosure

Posted on February 11, 2022February 22, 2023 by Emil Fleysher

Your home is where you spend most of your time and the last thing that you would ever imagine is facing a foreclosure on it. However, the lender can take ownership of your home through a foreclosure if you do not make your mortgage payments. Not only will you lose your home, but it will also have a heavy impact on your credit. It can be very difficult to recover without the help of a foreclosure attorney by your side. A foreclosure attorney can guide you through the foreclosure process and help you get back on your financial feet once it is complete. Here are some tips for rebuilding your credit after a foreclosure.

Make a Budget and Stick to It

The key to not going into foreclosure in the first place is to stay on top of your bills and stay within a clearly defined budget. Unfortunately, sometimes we make unwise decisions that can be impossible to recover from and lead to foreclosure. Once it is all said and done, the best thing to do is adjust your relationship with money and never let it happen again. You should sit down and look at your finances realistically. Then, you should create a budget that you can stick to without falling into debt. Now that you have a realistic look at your finances, you will need to stick to that budget and not slip up, as this can harm your credit in the long term.

Pay Your Bills on Time

One of the most significant impacts on your credit score is your payment history. You need to prioritize making payments on time, especially on things that can affect your daily living or credit. These can be things like utilities, car loans, and credit cards. If you have a hard time keeping up with bills, create reminders or try autopay features. Discuss a plan of action for paying your bills with your foreclosure attorney.

Look at Your Credit Utilization

When you are rebuilding your credit, you should monitor your credit utilization. This measure keeps track of your credit card debt and your total credit limit. It should stay under 30%, and if it is higher than that, you can see a negative impact on your credit score. A foreclosure attorney will suggest that you do not keep any credit balances and stay on top of payments when opening new accounts.

Get a Secured Credit Card

Another tip that a foreclosure attorney would advise for rebuilding your credit after a foreclosure is to start with a secured credit card. It can be challenging to get approved for a traditional credit card with a low credit score. This is where a secured credit card comes in; these credit cards require a deposit and will have a spending limit. It will impact your credit score, so make sure that you are making payments on time.

Have Some Patience While Rebuilding Your Credit

Your credit is one of the most important things you need to monitor for your financial health. Rebuilding your credit score after a foreclosure can be difficult, especially without the guidance of a foreclosure attorney. This process takes time and you will need to have patience. But it is possible to improve your credit and get you back on track.

How The Law Offices Of Emil Fleysher Can Help With Rebuilding Your Credit

When you are all out of options or are trying to avoid foreclosure, you should consult with a foreclosure attorney that has the knowledge and experience handling cases like yours. You may have tried credit counseling or doing things on your own to no avail. It is time to leave it to the professionals at The Law Offices of Emil Fleysher, P.A. Contact us online or call us at 888-886-0020 for a consultation today.

Bipartisan Student Loan Bankruptcy Bill Introduced

Posted on August 6, 2021February 22, 2023 by Emil Fleysher

The Fresh Start Through Bankruptcy Act would change the bankruptcy code to make it easier to discharge student loans under certain conditions. Senators Richard Durbin (D-IL) and John Cornyn (R-TX) are the bill’s sponsors (R-TX).

Undue Hardship

While it is not impossible to discharge student loan debt through bankruptcy under existing law, it can be extremely difficult. To do so, most borrowers must demonstrate “undue hardship,” which is a difficult legal standard to fulfill. Because the bankruptcy legislation does not sufficiently define “undue hardship,” courts have devised tests (which vary slightly by jurisdiction) to assist judges in determining whether or not a borrower fulfills the stringent criterion. Borrowers in many countries must demonstrate a “certainty of hopelessness” in their situation, which is sometimes an impossible undertaking.

Borrowers face additional challenges as they attempt to demonstrate excessive hardship. To establish their case for discharge of student loan debt through bankruptcy, a borrower must launch an “adversary proceeding,”; a lawsuit against their student loan loan lenders brought within the bankruptcy case. In most cases, student loan lenders will argue against the borrower’s points. The adversary procedure can be a lengthy, costly, and intrusive process. Student loan lenders, including the federal government, frequently have far more resources than borrowers, providing them a strategic advantage. As a result, many student loan debtors do not succeed, and others do not even try.

Waiting Time for Student Loans

The new bankruptcy reform plan would change that; it allows the cancellation of federal student loans in bankruptcy without the need to demonstrate undue hardship. Law would require borrowers seeking a discharge to have been in repayment on their loans for at least the previous ten years. This so-called “waiting time” would be similar to previous bankruptcy law requirements for student loans; prior to Congress passing legislation establishing the undue hardship criterion. The intention is to deter borrowers from attempting to discharge or cancel their student debts in the years immediately after their degree program graduation.

The fact that the bill has bipartisan support means that it has a good chance of moving through Congress and becoming law. Durbn stated today, “This is a huge moment.”
“For a long time, I’ve been introducing student loan bankruptcy [bills]. This is the first time it has been done on a nonpartisan basis. With this bill, we see a growing bipartisan understanding that the status quo is broken and that student loan bankruptcy reform is required.”

The bill’s legislative text, which will provide further details on the specifics of the reform ideas, should get its release in the following days. If you’d like to track the status of the bill you can do so here.

Auto Refinance in Ch. 13

Posted on November 16, 2020March 8, 2022 by Emil Fleysher

If you have recently been denied an auto refinance loan because (1) your credit score was too low; or (2) because your car is worth less than the current loan balance; or (3) because your car is too old, you may have another option…

What is Ch. 13 Bankruptcy?

Ch. 13 is a type of bankruptcy that provides for a personal reorganization of your finances. In addition to discharging your unsecured debts (i.e, credit cards, department store cards, medical bills, collections, and resulting judgments) you may be able to refinance secured debts, such as car loans, to lower the balance, lower the interest rate, and extend the payment terms to up to 60 months. The U.S. Bankruptcy Code provides the option for debtors in Ch. 13 bankruptcy to “cram” the loan balance down to the car’s current market value and pay that off, typically at a reduced interest rate, over a 36 or 60-month payment plan, as long as they’ve had the loan for at least 2.5 years.

Getting Approval for Auto Refinance Loan

Many people find themselves applying for an auto/car refinance loan because their interest rate is too high (often as high as 18% or more) or because they need money for something else and they are willing to cash out the equity in their car to get that money. Often, the applicant needs the money to pay certain bills that could be discharged in bankruptcy. However, to get approved for an auto / car refinance loan, the applicant must show (1) a good credit score, typically 700 or better; (2) a substantial amount of equity in the vehicle, meaning that the car is worth several thousand dollars more than the car note’s current balance; and (3) the car is not “old,” meaning it’s 6 years old or younger.

The reality is that most people in a position to be requesting such a loan cannot satisfy all 3 of these requirements. In that case, what are the options? Well, you can either (1) continue paying the loan as is; (2) you can surrender the car and have a repossession on your credit profile, or (3) you can explore your options with a Ch. 13 reorganizations.

If you’d like some more information about the Ch. 13 option and how/if it might work for you, please feel free to contact me for a free consultation. I’ll be happy to discuss your situation, explain the pros and cons of a Ch. 13 Bankruptcy Reorganization, and answer any questions you may have. You can use the form below or click on the chat button at the bottom right corner of your screen.

"*" indicates required fields

Year*

Make*

Model*

Model Trim (if known)

Approximate Mileage*

Condition

When did you purchase the vehicle / take out the loan?*

VIN

If you have your Vehicle Identification Number (VIN) please enter it here for a more accurate calculation.

Your Name

First Last

Please provide the best email address to contact you with the results.

Phone

If you prefer to be contacted by phone, please let us know the best number to call.