The condition of being bankrupt:  a condition of financial failure caused by not having the money that you need to pay your debts
Mirriam-Webster

Bankruptcy can be a very scary word, especially when it is not fully understood.  Some believe that individuals who petition for bankruptcy relief are poor while others feel so embarrassed at their situation that they stay frozen and remain cemented in debt and hardship.  In 2013 there were over 1 million bankruptcy cases filed in the US bankruptcy courts. If successful, Bankruptcy provides a fresh start enabling debtors to move forward free of debt and without their feet stuck in cement.

Here are a few tips to consider before filing for bankruptcy:

• There are 3 types of bankruptcy, Chapter 7, Chapter 11 and Chapter 13.
  • Chapter 7 is generally the preferred option for if successful, it allows a debtor to discharge all of their debts while retaining exempt assets.
  • Chapter 11 is used mostly by business and allows business and individuals to stay in business and reorganize their debts and organization.
  • Chapter 13 bankruptcy allows individuals who are wage earners to reorganize and retain their assets while paying upon a court approved payment plan which typically lasts for 3-5 years.
  • Bankruptcy will allow a debtor to start fresh but will be noted on a credit report for 7- 10 years.
• Not all debts are eliminated in bankruptcy including taxes, most school loans, child support, alimony, court fees, government-imposed fines, restitution or penalties, debts that were not dischargeable from another bankruptcy and debts not listed on the initial schedule filed (this is only a partial list).
• Filing bankruptcy is a constitutional right which presently can only be elected as permitted by law for those debtors who are eligible and qualify and helps debtors who have created or suffered financial mismanagement or hardship.
• In order to avoid financial problems in the future, individuals and companies must learn how to create and follow budgets, change spending habits and create safe guards or nest eggs.

Making a mistake in bankruptcy court can cause major damage leading to a dismissal of the case and possible criminal sanctions. Contact an experienced bankruptcy attorney to determine which bankruptcy is viable and if so which bankruptcy chapter is appropriate for your situation.  Your attorney will prepare and file all the legal documents on your behalf and will represent you in court.

Ronald A. Luzim understands that financial needs of each client is different and offers personal service for each case.  He works with his clients to ensure they understand all their options and risks and pursues the most effective path to debt relief.  Ronald A. Luzim, a former estate and tax attorney with the IRS has been practicing law since 1974 and specializes not only in asset protection, business and bankruptcy law and also a certified family circuit court mediator, family law and estate planning.  Please contact his Coral Springs office at 954-755-1500 for assistance in protecting yourself, family and property.