Consumer credit and bankruptcy

Many people living in Florida understand that credit can be a two-edged sword. Being able to take out a mortgage, car loan or obtain a credit card can be a solid financial strategy. Yet, taking out too much debt can result in extreme stress and even financial disaster if one’s income becomes insufficient for making payments.

Federal Reserve data shows that consumers around the country slowed down their borrowing in August 2017. While this isn’t particularly a cause for concern, as borrowing trends can wax and wane over time, economists do pay attention to these shifts as they may indicate that other economic changes are afoot.

Regardless of economic conditions, there are situations in which individuals and couples have more debt than they can reasonably be expected to manage. Yet, they may still have assets, such as a house or an automobile, that they would prefer to not give up. One option for managing debt is Chapter 13 bankruptcy.

In Chapter 13, debtors propose a repayment plan that is submitted to the court for its approval. During the repayment period, which lasts either three or five years, the debtor makes monthly payments to a bankruptcy trustee who then distributes the funds to creditors. Once the payment plan has been completed, many remaining unsecured balances are discharged.

Individuals who are struggling with their financial obligations may benefit from speaking with an experienced lawyer. Chapter 13 is designed for people who have a reliable source of income, and there are other eligibility requirements that the lawyer can outline while discussing other forms of relief that might be available.