Facing a judgment can be a stressful and overwhelming experience, especially if it involves financial obligations. In Florida, a judgment can lead to wage garnishment, bank account levies, and even property liens. Additionally, a Judgment in Florida can be enforced for up to 20 years. But what if you’re struggling to pay your debts and don’t know how to handle a judgment? This is where bankruptcy comes in. In this article, we’ll discuss whether bankruptcy can clear a judgment in Florida and how the process works.
The answer is yes, bankruptcy can clear a judgment in Florida. Bankruptcy is a legal process that allows individuals and businesses to eliminate or repay their debts through a court-approved plan. There are two types of bankruptcy that can help clear a judgment in Florida: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy is also known as a “liquidation” bankruptcy. It allows individuals to discharge most of their unsecured debts, such as credit card bills, medical bills, and personal loans. If a judgment is included in the debts that are discharged, it will be cleared.
Chapter 13 bankruptcy is also known as a “reorganization” bankruptcy. It allows individuals to repay their debts over a three to five-year period. If a judgment is included in the debts that are being repaid, it will be cleared at the end of the bankruptcy case upon receipt of an order of discharge.
In Florida, a judgment lien can be placed on real estate and personal property owned by the judgment debtor. Filing for bankruptcy can help clear a judgment lien in some cases. In a Chapter 7 bankruptcy, if the lien is attached to exempt property, it can be eliminated along with the underlying debt. In a Chapter 13 bankruptcy, the judgment lien can be avoided or “stripped” if it impairs an exemption, meaning it interferes with the debtor’s ability to claim an exemption in the property. It’s important to consult with a bankruptcy attorney to determine how filing for bankruptcy can impact a judgment lien in your specific situation.
The bankruptcy process in Florida starts by filing a petition with the bankruptcy court. The petition will include a list of all your debts, assets, and income. Once the petition is filed, an automatic stay goes into effect. The automatic stay is a legal protection that stops creditors from collecting on your debts, including a judgment.
After the petition is filed, a trustee will be appointed to oversee your case. The trustee’s role is to review your financial information and ensure that your creditors are paid as much as possible. If you’re filing for Chapter 7 bankruptcy, the trustee will sell your non-exempt assets to pay off your debts. If you’re filing for Chapter 13 bankruptcy, the trustee will oversee the repayment plan.
Once the bankruptcy case is complete, the discharge will be granted. The discharge is a court order that eliminates your liability for most of your debts, including a judgment.
Not all judgments can be cleared through bankruptcy. Some judgments, such as criminal fines or penalties, cannot be discharged in bankruptcy. Additionally, if a judgment was obtained as a result of fraud, it may not be dischargeable in bankruptcy.
In Florida, you may be able to keep some of your property through exemptions. Exemptions are laws that protect certain assets from being sold to pay off your debts. For example, in Florida, if eligible, you can claim the homestead exemption to exempt 100% of the equity in your primary residence, up to $1000 in personal property, and fully exempt most retirement accounts.
The length of time it takes to clear a judgment in Florida through bankruptcy depends on the type of bankruptcy you file. If you file for Chapter 7 bankruptcy, the process typically takes four to six months. If you file for Chapter 13 bankruptcy, the process typically takes three to five years. During this time, you will be required to make payments to the trustee, who will then distribute the funds to your creditors.
Yes, filing for bankruptcy will affect your credit score. However, the impact on your credit score will depend on several factors, including the type of bankruptcy you file and the current state of your credit. On average, individuals who file for bankruptcy can expect their credit score to drop by 200-250 points. However, many people find that their credit score improves within a few years after filing for bankruptcy because they are able to get back on their feet financially and start making regular payments on their debts.
In conclusion, bankruptcy can clear a judgment in Florida. Whether you file for Chapter 7 or Chapter 13 bankruptcy, the process allows you to discharge most of your debts, including a judgment. While bankruptcy will affect your credit score, it can also provide you with a fresh start and the opportunity to regain control of your finances. If you’re facing a judgment in Florida, it’s important to speak with a bankruptcy attorney to discuss your options and determine if bankruptcy is the right choice for you.
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