If you’re a Florida resident facing piling debts and possibly foreclosure, with no foreseeable way to pay what you owe, you may have given some thought to filing for bankruptcy protection. While there are two main bankruptcy chapters Florida consumers can file, including Chapter 7 (liquidation) and Chapter 13 (reorganization), the current COVID-19 pandemic has led to a greater number of Chapter 7 filings due to a combination of higher unemployment rates and reduced wages for those who have still been able to retain at least some form of income.

However, despite Chapter 7 being the obvious step for consumers who cannot afford to pay their creditors, many are apprehensive about filing because they’re worried about how their bankruptcy petition will affect their loved ones. If you’re one of those consumers, we’re here to help assuage your fears. 

Filing for Bankruptcy as an Individual: What to Expect

When you file for Chapter 7 bankruptcy in Florida as an individual, you can expect to have most of your unsecured debts discharged within four to six months. Your credit score will undoubtedly take a hit, but the actual impact on your credit score is impossible to determine because results vary per individual. Usually, the higher your credit score at the time of filing, the more significant the impact will be. That being said, Chapter 7 filers can start to rebuild their credit much faster than those filing for Chapter 13, which can take anywhere from three to five years to exit. 

Will Creditors Come After My Family?

If you’re worried that filing for Chapter 7 bankruptcy protection will affect your family’s credit as well, you’ll be happy to know that it will NOT. Only the individual filer’s credit will be impacted.

In a liquidation bankruptcy, some of the debtor’s possessions may be sold to pay back creditors, but if you’re unemployed and don’t have any property of significant value, this won’t be a problem. You’ll still be able to proceed with the petition and your family’s property is unlikely to be touched.

Now, if you’re married, the lines become a little more blurred. While your spouse’s credit will not be affected by your individual bankruptcy filing, any non-exempt joint property of significant value may be sold to pay back creditors. Still, you’re allowed a certain number of exemptions and it is HIGHLY unlikely that you’ll have to relinquish standard household furnishings — especially those that depreciate in value — like your TV, couch, or clothing. 

Still Concerned? A Florida Bankruptcy Attorney Can Help

Even if you’re the only person who’s credit or possessions are impacted after filing for bankruptcy, the process can still take a toll on your loved ones. If you have questions about proceedings, it’s in your best interest to consult with an experienced Florida bankruptcy lawyer prior to making any decisions.

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