The coronavirus pandemic has hit Florida hard. The USA has currently had almost 300,000 deaths as a result of COVID-19, and Florida makes up over 6% of this total. In April, during the beginning of the pandemic, the Florida unemployment rate tripled, plunging thousands of residents into economic hardship.
If you are currently living in Florida and are thinking about filing for bankruptcy, make sure you first speak to a trained Florida bankruptcy lawyer, as they will be able to discuss your options regarding which type of bankruptcy Here are some of the things you need to prepare for bankruptcy in Florida, as well as some things you should avoid doing.
Make sure bankruptcy is the right option
While bankruptcy can offer you a fresh financial start. However, as with most financial decisions, it will have a big impact on your life, so you must not take it lightly. Make sure you speak to a professional bankruptcy lawyer before you make any major decisions regarding your finances.
Get your income statements together
Once you have decided that bankruptcy is the best option for you, you need to gather proof of your income. If you are filing for chapter 7 bankruptcy, you will need copies of your tax returns and copies of proof of income for the last six months.
To qualify to file under Chapter 7, your average income must be below the median income in your state. Therefore, you will have to complete and pass a chapter 7 means test.
Prepare copies of your credit report
The second step you want to take as you prepare for bankruptcy is to obtain copies of your credit reports. You can get this online for free every 12 months.
Make sure that you include each creditor you owe money to on your forms, otherwise, you will still owe them money when your bankruptcy case is complete.
Things you shouldn’t do before you file for bankruptcy in Florida
Don’t take on any new debt
When you know that you are filing for bankruptcy, it can be tempting to max out your credit as much as possible, because you’re planning to discharge it or reduce it with a bankruptcy filing. However, these debts could be difficult to discharge, and this will complicate your bankruptcy proceedings.
Try not to spend excessively on your credit card
Your credit card usage can determine whether or not your bankruptcy application will be successful. It’s important that taking a cash advance is presumed to be an attempt to defraud creditors if it’s for an amount over $1,000 and within 70 days of filing. It is also recommended that you don’t make single purchases that are over $725, as this will be considered fraudulent.
Consider withholding payments to unsecured creditors
Before your debts get discharged, it’s a good idea to reduce payments on unsecured debt that is likely to be discharged in bankruptcy. For example, you should avoid paying a large amount of money back on loans from family and friends, as the court may consider these “preferential transfers” if they are paid more than other creditors.
There are a number of complex things you need to sort before you file for bankruptcy, so make sure you contact a professional bankruptcy lawyer in Florida before you start preparing.