In the South Florida area, there is an overwhelming amount of commercials on TV, radio and print media promoting debt relief or debt reduction services. Many of these consist of some type of debt consolidation, personal loans, and yes, even bankruptcy. Not because we are a Miami bankruptcy law firm, but what is the best option for you?
Debt consolidation is a service offered by a third party where the individual makes one monthly payment to cover most or all of the debt. This third party company contacts your creditors and agrees to pay a certain portion of the debt. The creditors have the right to decide whether or not to be included in your repayment plan. They may also be harder to include if the debt has been charged off. Once your plan has been created, you will pay your agreed monthly payment to the debt consolidation company. This amount will cover all payments agreed upon with your creditors plus a monthly fee for their service. Any debt that is remaining outside of the debt consolidation will have to be paid directly by you. This process has no direct timeline but could take anywhere from 6 months 2 years, depending on the amount of debt being paid off.
A personal loan may allow you to pay off any debt to your creditors. The individual requesting the loan will need to be approved first and they may not get a loan to cover all of their debt in full. You will then be required to pay back the company who supplied the personal loan. The loan may require you to post collateral for any amounts they will be lending, which may create a problem if you do not have enough assets to provide. There may also be high interest rates
associated with your loan, depending on your credit score.
If you choose to file for bankruptcy, all of your unsecured debt is included. There is only very rare and special circumstances, primarily fraudulent activity, which would cause the creditor to request to be removed from your bankruptcy case. In a Chapter 7 bankruptcy filing, you may finalize your case without paying back your creditors any money. The only fees you may incur would be your attorney’s fees and administrative fees that are usually agreed upon prior to filing the case and paid through an affordable monthly payment plan. A discharge is provided at the end of the case and shows that you complied with all of the requirements of your bankruptcy filing and that you are no longer responsible to pay back the creditors included in your case (for example, excluding any amounts owed to government entities, student loans and child support). A Chapter 7 bankruptcy in Florida usually takes about 91 days from start to finish in the federal
We are a Miami bankruptcy law firm that is focused in filing for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy as well as Debt Collection Defense in Miami-Dade, Broward, and Palm Beach counties. For more information, please contact our office at 305-820-0334 to attend a free consultation with our Miami debt relief attorney to discuss your options.