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Jacksonville Attorney’s Advice on Taking Control of Your Financial Situation

Debt, Mortgage, Laid off, BankruptcyJacksonville bankruptcy attorneys, and attorneys everywhere have faced record numbers of new clients with debt problems. The last five years have been devastating, with home values plunging and politicians screaming across the country that they have new solutions to help us from drowning in debt. There is no doubt that the economy will be the largest issue of the upcoming Presidential Election.
Statistics are a staggering example of our economic squalor. There were 1.4 million bankruptcies across America in 2011, up about a million cases from 2007. A million extra cases per year in only four years is a motivating factor, but what can we do about it?
Most people aren’t sure what to do. Their jobs have lowered their pay or laid them off altogether, many of them are coasting by on savings and hoping for the economy to pick up. Many are depending on loan modifications that may never be granted. Even the government’s Home Affordability Modification Program (HAMP) has been called a Scam.
Using credit cards to survive is like clutching a life raft with a pinhole in it. You can put a little air into it occasionally to get by, but without fixing the problem you’re eventually going to run out of air and the ship is going to sink. I urge people to use credit if they must, but to recognize that this cannot go on forever.
One of the worst things I see is when people mortgage their home or take 401K withdrawals to try and support themselves through the struggle. In Florida, 401K accounts and most homesteads are exempt from collection by creditors in bankruptcy. Too many people try and use these funds to coast a little closer toward dry land, but it’s often not enough. When these people file bankruptcy, those funds they used trying to avoid filing are gone. This is often a loss of tens of thousands of dollars that could have been used for rebuilding.
According to, a home mortgage should not exceed 28% of your gross annual salary. If your home mortgage now exceeds this due to a loss of income, you should contact an attorney immediately about your options. Although many take years to accept it, a bankruptcy may be the only way to get out from under a house. By realizing this now, you may be able to preserve assets and restore credit sooner instead of spending years with your mortgage debt looming.
If you don’t have mortgage debt and you have only credit card debt, you can follow‘s Back-end ratio to see if you can afford your payments. Your Back-end ratio will give you a monthly budget amount that you can afford to pay toward your debts. If the total of your interest only credit card payments comes close to or exceeds this number, you should probably consider filing for bankruptcy.
Once you have these factors under control, save three months of living expenses in a savings account. Then you should be in a very secure place.
By taking the steps to control where your debt is headed today, you can be better prepared for the hard times to come. By contacting a Jacksonville Bankruptcy Attorney, we can analyze your financial situation to see if bankruptcy or some other option is best for you. You may call us at (904) 685-1200 for a free initial consultation.

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