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Tampa Bankruptcy And Reorganization Blog

What are the differences between Chapter 11 and Chapter 13?

Individuals who are contemplating filing for bankruptcy to get out of debt may wonder whether they should avail themselves of the financial relief provided under Chapter 11 or Chapter 13. In most instances of consumer bankruptcy, Chapter 13 will be the more appropriate choice -- but not always.

If a filer has too much debt or an irregular source of income, for instance, they may decide to file for bankruptcy under Chapter 11. Other possible reasons for this type of filing over Chapter 13 is that they want to remain debtors-in-possession (DIP) of the assets or need additional time to repay their debts than the five-year repayment plan required in Chapter 13.

Is a kid's college fund protected in bankruptcy filings?

If you've been socking away money for your child's college education since he was wearing diapers, it is understandable that you would not want any subsequent financial stress you may have to cause that money to be lost in a bankruptcy proceeding.

The good news is that it is possible that your 529 plan may be protected from bankruptcy. The provisions of a 529 plan allow parents to dedicate funds for a child's educational expenses and also benefit from some tax breaks. While the child remains the account beneficiary, parents retain ownership and control of the account.

Could your business be saved by filing for Chapter 11?

Being a small business owner has its perks, but it is not for the faint of heart. Especially in the first few years when there are operational costs that might exceed the revenue generated, it can feel like a losing proposition.

That makes it challenging to know when to throw in the towel on your small business. But what if you could ease the pressure from creditors and still keep the doors of your business open to customers?

Should farmers consider filing for Chapter 12 bankruptcy?

The United States is approaching uncertain financial times once again. The outcome of some trade wars with foreign governments can have a negative effect on America's farmers and their ability to get top prices for their harvests.

This trickle-down effect can put farmers who are already hovering on the financial brink right into the hole. Here in Florida, farmers also are at the mercy of the weather. If 2019 proves to be a busy hurricane season for the Southeast, farmers' finances may become even more vulnerable in the face of crop losses.

Anticipated increase in farm bankruptcies didn’t materialize

Despite a cavalcade of precursors and dire predictions, Chapter 12 bankruptcy filings in the U.S. were down 8 percent in fiscal year 2018.

The predictions were based on a low net farm income, rising ag debt and interest rates, dragging commodity prices and rising debt-to-asset ratios. Those factors were still present, and while the 468 Chapter 12 filings in fiscal year 2018 were lower than the 508 filings in fiscal year 2017 (which ends each Sept. 30), the number was still 25 percent higher than the filings in 2014.

Is the shutdown leaving you in debt? Look at your options

If you are a federal worker in or around Tampa and are furloughed right now -- or worse, working without pay -- you may be struggling mightily to make ends meet. You might not be fortunate enough to have an emergency stash of cash to meet your basic needs and pay the bills.

When your financial security is at risk, it is very unsettling, even for those who have somewhat of a cushion. But you may have some options to make it through the worst of it, including:

  • Cutting way back on expenses like Netflix and Amazon Prime
  • Joining the gig economy on a part-time basis
  • Getting loans from family, friends or your synagogue or church

It doesn't hurt your credit rating to check your score

When was the last time that you checked your credit score? Has it been awhile? Maybe you are afraid to see how bad it really is, or perhaps you mistakenly believe that checking your credit score can damage your credit rating. That is not the case, and it is actually a very good idea to check your scores regularly so you can be aware of any changes or errors.

Why do people think checking their credit will lower their scores in the first place? It's likely because credit inquiries from potential lenders like banks and credit card companies can take your score down a few points and will show up on your report for a couple of years. However, that doesn't include periodic checks by the individual.

What is an involuntary bankruptcy?

Debt takes a heavy toll on those who owe and sometimes forces them to seek relief via bankruptcy. But there is a little-known tool that creditors can use to get their money -- involuntary bankruptcy.

Most people have never heard of this underused process creditors can use to recover their cash. But if a creditor feels that a debtor is frittering away assets without paying down debts, the creditor may use the bankruptcy courts to force debtors into involuntary bankruptcy proceedings.

Are you a Florida farmer who's deeply in debt?

Many debtors contemplating filing for bankruptcy have never heard of a Chapter 12 bankruptcy. This unique bankruptcy filing is only available to owners family farmers or those in similar employment situations.

Chapter 12 options first became available in the 1980s to address the economic woes of those struggling to make their living off the land and sea. Rather than resembling the clear slate approach of Chapter 7 filings, Chapter 12 bankruptcies are more akin to filing for Chapter 13.

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