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Should I Negotiate with my Creditors or File Bankruptcy?

People who have an income but still cannot pay all of their bills have several debt relief options available to them.

Creditor Negotiation or Bankruptcy

If you are trying to determine whether debt negotiation or a Chapter 13 bankruptcy is the best option for you, we can help. We can review your individual circumstances and help you make an educated decision, but below are a few tidbits of advice to consider:

  • Cost. Obtaining debt relief can be expensive, so you must consider what it will cost you. Typical Chapter 13 filings cost somewhere between $2500 and $4000. While this amount seems expensive, your lawyer’s fees can be included in your Chapter 13 plan, which means you can pay the bulk of this amount over a three to five year period. The cost of settling your debt is often 10% of the total amount of the debt that is being settled, but it usually must be paid in advance. There may also be monthly fees that you must pay.
  • Taxes. Debt relief options can have negative tax consequences, so you want to make sure you fully understand and are prepared to handle them. Fortunately, there are no tax consequences to obtaining relief from your debt in a Chapter 13 bankruptcy. In contrast, however, when you settle debt and the creditor “forgives” a certain amount, the forgiven amount will result in tax liability. When the forgiven amount is more than $600 it is considered income to you and you will be sent a 1099c tax form.
  • Time. You must understand the time commitment it takes to resolve your financial problems. Chapter 13 cases last three to five years. Although this is a long time, you also obtain a fresh financial start when it is over. Bankruptcy allows you the most comprehensive means for dealing with your debt. Although debt negotiations can occur quickly, they can also take a long time. If you only have on creditor to negotiate with, the process is easier and quicker. However, if you have several accounts with different creditors that need to be negotiated, the process gets more complicated and takes longer.
  • Credit score. Both bankruptcy and debt settlement will negatively impact your credit score. Your Chapter 13 filing will remain on your credit report for seven years. Debt that is reported as uncollectible or forgiven can also remain on your report for seven years. It is important to understand, however, that you can immediately begin rebuilding your credit score and, with time and patience, you can get your financial life back on track.

Don’t delay any longer. Call us today to schedule your initial consultation. We can discuss your options for bankruptcy or negotiation with a creditor. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.

Negotiating Payment Plans with your Creditors

payment plan pic

If you are considering negotiating a debt settlement plan with your creditors or you are hoping to avoid filing bankruptcy by settling your debt, it is essential to confer with an experienced debt relief attorney. Each creditor handles their debt settlement procedures differently, so working with a knowledgeable lawyer can help ensure a positive outcome.

It is important to also understand that a creditor is typically not required to negotiate a debt settlement plan with you. In fact, there are several factors that most creditors take into consideration when deciding whether to settle with you, including:

  • Your total amount of debt owed
  • The type of debt (secured by collateral or unsecured)
  • Whether you are negotiating with the original creditor or a debt collector
  • How much interest has accrued on the debt
  • The amount of your total income
  • Whether you have previously filed a personal bankruptcy and how long ago the filing occurred
  • Whether you have any pending foreclosures or asset seizures

A significant advantage of working with a lawyer who handles Chapter 7 and Chapter 13 filings to handle your debt settlement negotiations is that your creditors will understand that bankruptcy is an option for you. This is important because many creditors will be paid nothing if you file for bankruptcy, so it motivates them to settle for a lower amount in order to avoid not getting paid at all.

An attorney can also ensure that the creditor is not tacking on unwarranted interest or fees to the amount you owe. Additionally, having a lawyer draft (or at least review) your settlement agreement is important to ensure that your best interests are protected. Finally, if negotiations do not work out with your creditors, your debt relief attorney can help you understand whether filing for bankruptcy is a beneficial option for you.

The Importance of Listing Your Creditors in Bankruptcy

Bankruptcy law requires all debtors to fully disclose all of their assets, debts, income and expenses. You must also file a list of all of your creditors, including any family members or friends that have borrowed money from you.

Bankruptcy Lawyer serving Brevard County

It is crucial to list all of the parties that you owe money to in your bankruptcy filing so that they will be provided written notice of your case. When a creditor is provided notice of your Chapter 7 or Chapter 13, they are prohibited from taking any collection actions against you. In contrast, if a creditor isn’t given notice of your filing and is unaware that the automatic stay is in place, the creditor will likely continue its collection activity against you.

You must also include all of your creditors in your Chapter 7 or Chapter 13 because the law requires that all creditors with the same type of debt (priority, secured or unsecured) be treated the same. This means that you cannot pay one credit card bill so that you can keep it while discharging all of your other credit card debt. Failure to list all of your creditors, especially if you intentionally omit certain ones, can result in serious issues in your bankruptcy filing.

Finally, when you file your bankruptcy pleadings, you sign them under penalty of perjury. If you intentionally omit financial information, the court can find you guilty of perjury. We can help you cover all of your finances and ensure that you make full disclosures and that the automatic stay provides you comprehensive protection.

Contact a Bankruptcy Attorney at Faro & Crowder, PA

If you have questions about filing for bankruptcy protection, we have the answers. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.

Is It Time for You to File Bankruptcy?

When you file bankruptcy it can help you obtain a fresh financial start. However, it can be difficult to know when the best time to file your case is. There is no magic formula for pin-pointing the best time to file a Chapter 7 or Chapter 13, but there are many warning signs that a bankruptcy filing should be considered.

File Bankruptcy | Melbourne, Florida - Brevard County and the Space Coast

A few examples of warning signs that a bankruptcy filing should be considered include:

  • Your mortgage lender is threatening foreclosure of your home
  • Your car, boat, ATV or other assets are being repossessed by creditors
  • Collection lawsuits are pending against you
  • You do not have insurance and your medical bills are overwhelming you
  • Your wages and/or your bank account is being garnished
  • You are being harassed by debt collectors
  • You are delinquent on your taxes
  • Most of your debt is unsecured (such as credit cards)
  • You do not have an emergency fund or any savings
  • Excluding your secured loans (mortgage, vehicle loan, etc), you cannot pay your total debt in full within five years

It May Be Difficult to Figure out the Best Timing to File Bankruptcy

Deciding whether to file a personal bankruptcy case is difficult, but figuring out the best timing can be even harder. The above list is just a few examples of the situations that may warrant filing for bankruptcy.

Collection Efforts Will Stop When You File a Bankruptcy Case

The good news is that whatever your circumstances, if you decide to file a bankruptcy case, the collection efforts against you will stop. The automatic stay is immediately effective when you file your petition, which prohibits any further collection activity against you. We can review your finances and decide if bankruptcy can provide you the debt relief you need.

Contact a Brevard County Bankruptcy Attorney today

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of Brevard County and the Space Coast.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Speak with an experienced Bankruptcy Attorney at Faro & Crowder, PA 321-784-8158

We offer a free initial consult for bankruptcy, debt relief, credit card debt and foreclosure defense.  Contact our office to schedule your consultation and discuss your debt relief options.

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Faro & Crowder, PA
Phone: 321-784-8158
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Melbourne, FL 32935
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We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.

Can Social Media Negatively Impact Your Bankruptcy?


You might be surprised to learn that attorneys are using social media to gather evidence for lawsuits. Facebook, Twitter, Instagram and numerous other websites provide a wealth of information about people. It is important to remember that what you post on social forums can be used against you by creditors and/or the trustee in your bankruptcy case. Consider the following:

  • When you file a personal bankruptcy, you must make full financial disclosures. This means you must list all of your assets, debts, income and expenses. Thus, if you post a picture of a new motorcycle you just bought and it is not listed in your bankruptcy filings, it can raise issues in your case.
  • When you disclosed your income, did you remember to include your side-job selling crafts on Etsy? Failure to disclose a source of income can negatively affect your bankruptcy case.
  • A Chapter 7 or Chapter 13 debtor must follow strict guidelines regarding their budget while their case is pending. In other words, you cannot make unnecessary or frivolous purchases while not paying all of your creditors in full. Any posts you make regarding vacations, expensive purchases or other questionable expenditures can cause trouble for you.

Bankruptcy trustees typically do not actively search social media websites trying to catch you in a lie, but a disgruntled creditor might. Thus, the wisest thing you can do to ensure your bankruptcy filing is a success, is to be honest and make full financial disclosure in your pleadings. Additionally, you should think before posting and refrain from putting anything out there that you would not want the trustee or your creditors to see!

If you are considering filing for bankruptcy protection, contact the skilled attorneys at Faro & Crowder to schedule a free consultation. We are located in Melbourne and proudly serve all of Central Florida.

Bankruptcy Discharge: What does it really mean?

The primary goal of filing a personal bankruptcy is to eliminate debt or obtain a “discharge of debt.” A discharge order cancels your liability to repay the debt. As a result, many people save thousands of dollars by filing a Chapter 7 or Chapter 13 case, which is often referred to as obtaining a fresh financial start.

When you file bankruptcy, you are required to disclose ALL of your debts, assets, expenditures, income and other financial information. You must file a complete list of your creditors (anyone you owe money to) which is called the “creditor matrix.” The court uses your creditor matrix to mail notice of your filing to all of your creditors. This benefits you because all of the creditors who receive notice of your filing will be bound by your discharge order.

At the conclusion of a successful bankruptcy case, you will receive your discharge order. Once you obtain your discharge, creditors are prohibited from taking any collection activity against you regarding the discharged debt. This means you will no longer receive harassing telephone calls, demanding letters, or have collection lawsuits filed against you for discharged debts. If a creditor ignores the discharge order and take action to collect a discharged debt, you may be able to recover a monetary judgment or sanctions against that creditor.

Contact Faro & Crowder, PA to discuss your individual circumstances with an experienced personal bankruptcy attorney. If you have questions regarding filing a Chapter 7 or Chapter 13 case, contact us for a free consultation.

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