A bankruptcy attorney in St. Petersburg, FL, typically becomes much busier when the country is in a recession. Even during strong economic times, many U.S. residents live paycheck to paycheck. They carry too much debt for their income. When someone’s job is eliminated, even if only temporarily, they might have no choice but to file for Chapter 7 or Chapter 13 bankruptcy protection.
Lawyers expect filings to increase in 2020, just as declarations of bankruptcy did in 2008 and for several years afterward. As of March, attorneys have reported an uptick in consultations with people worried about their finances.
Unemployment Benefits and Reduced Income
Trying to survive on unemployment benefits can be tough, especially for parents trying to keep their children fed properly and well cared for. They might turn to credit cards to pay for groceries or the cost of utilities.
After some time, minimum payments get too high to be affordable and fees and penalties begin to pile up. This is when it becomes necessary to consult a bankruptcy lawyer.
Chapter 13 and Chapter 7
Chapter 13 allows U.S. residents to work out a payment plan over three to five years, during which they pay back all or most of the money they owe. Chapter 7 is also an option. It wipes out all qualifying debt and the filer liquidates certain assets in the process.
Often, people who file for Chapter 7 with a bankruptcy attorney in St. Petersburg, FL, no longer have any assets to dissolve. Bankruptcy is a last resort after they have used up their savings and tapped all their lines of credit.
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