Bankruptcies are Increasing in Florida

Nestled inside a thoughtful Tampa Bay Times article is news that bankruptcies have begun to rise in Florida again. According to the article, filings have jumped 11% in the past year, although the rate has risen much more slowly in the rest of the country (only 1%).

Usually, increases in the bankruptcy rate follow declines in the overall economy. However, Florida’s economy seems strong. Job growth has been healthy and wages have ticked up. In a strong economy, debtors should be able to pare down the debt that they built up during leaner years. Either the economy is beginning to slide for many people in Florida or something else is the cause of the increase in filings.

Job Loss and Medical Emergencies Lead the Way in Tampa

The Tampa Bay reporter spent a day in a meeting of creditors, where debtors meet with the trustee who is overseeing their bankruptcy. This meeting, called a 341 meeting, is public. Few creditors show up to ask questions, though they have a right to. Instead, the trustee does almost all of the questioning.

The most common question is “What caused the bankruptcy?” Most of the people cited some economic crisis as the reason:

• One man was an audio manager who was cut and replaced by a worker getting paid $11 an hour.
• One woman had to cut her working hours to part time because she needed to take care of her sick mother.
• Another woman incurred expenses because her daughter was special needs.

Other stories are more eye-opening. One woman cosigned on a loan for a sister, who promptly stopped paying. The woman also let her sister use her credit card, which resulted in a $50,000 bill. Unable to keep up with these debt payments, the woman had no choice but to file for bankruptcy.

Finding Assets to Sell

There is another purpose to the 341 meeting. The trustee also tries to uncover whether the debtor has assets that can be used to pay off creditors, at least partially. For example, if a debtor has a lawsuit against someone, then any judgment or settlement could go to creditors.

One couple in the Tampa Bay Times story had a Lincoln Town Car that they owned free and clear. As the trustee told them, he needed to sell the car because it had sufficient value, which the creditors were entitled to. Of course, if you have a vehicle, you might be able to exempt some or all of the value. Meet with an attorney to evaluate your case.

Remember that the trustee does not look out for your best interests. Instead, he or she acts as a fiduciary for the creditors. The only one looking out for only your interests is your bankruptcy attorney.

Contact Us Today

Nowack & Olson has represented many distressed debtors. We have handled countless Chapter 7 and Chapter 13 bankruptcies and can advise you about which is the best option.

Please call us today. You can schedule a free consultation with one of our Plantation bankruptcy attorneys by calling 888-813-4737.

Resource:

tampabay.com/business/what-caused-the-bankruptcy-x2014-a-day-with-debtors-in-tampa-bay-bankruptcy-hearings-20190702/

https://www.floridabankruptcynow.com/debtors-explain-why-they-filed-for-bankruptcy/