Q: I think I need to file for bankruptcy, but I’m not sure how to proceed. My husband and I are divorced, and I have just recently lost my job. I am raising two teenagers and I am in over my head with debt. There was a period of over three years when my ex did not pay any child support, because he was not working. I ended up maxing out my credit cards just to keep a roof over head and food on the table. Now those debts are in the five figures and I am going broke just making minimum payments. My ex is trying to catch up on his child support, but nothing will ever catch up on the interest that I’m paying on orthodontics and other expenses.
How do I file for bankruptcy as a single mother, and not lose everything that I have?
A: My mom raised me as a single parent, and I understand completely how hard it can be. Since you are in so far over your head, I would advise bankruptcy in order to let you get a fresh start. No joke, it might be a little rough, but at the end you will have a fresh start and a chance to rebuild your life. I don’t blame any parent who puts the necessities of life for their children on a credit card when that is the only way available to them.
I’m not sure what assets you have, and for that reason I will not recommend either a Chapter 7 or Chapter 13 in this venue. However, Chapter 7 is a liquidation bankruptcy. Basically it takes your nonexempt assets and liquidates them in order to pay off your creditors. Unsecured debt such as the debt you accrued on your credit cards is paid after any secured debts, and may be wiped out entirely. There is a means test to file this type of bankruptcy, and if you do not meet the criteria, your Chapter 7 filing would be converted to a Chapter 13.
Now, there are specific exempt asset classes that you can claim in bankruptcy. As a Florida resident you are able to designate a homestead, and your unemployment compensation is also exempt from being considered as an asset. If you have a pension, qualified tuition savings accounts, medical savings accounts, or hurricane savings accounts these are also exempt asset classes, so the money that your husband is paying for child support can still be counted on.
In order to advise you, I need to see what you’re working with before I can give you the best legal advice. Our offices in Fort Lauderdale and West Palm Beach are open seven days a week, and your initial consultation is free, so I urge you to get in touch with us and book an appointment. We can work with you on paying for your bankruptcy, and help you to get a fresh start for you and your kids.