Debunking the Top 10 Bankruptcy Myths for Florida Families: Insights from a Melbourne Bankruptcy Attorney
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As a dedicated Bankruptcy Attorney serving Melbourne, Florida, and all of Brevard County, I've helped countless families navigate the challenging waters of financial distress. Bankruptcy can be a lifeline for those overwhelmed by debt, offering a fresh start under Florida law. Yet, misinformation abounds, deterring many from seeking the help they need. In this post, we'll debunk the top 10 bankruptcy myths specifically for Florida families, drawing on real insights from Chapter 7 Bankruptcy and Chapter 13 Bankruptcy cases I've handled in Brevard County courts.
Whether you're in Titusville, Palm Bay, or right here in Melbourne, understanding these myths can empower you to make informed decisions. Bankruptcy isn't a sign of failure—it's a tool protected by federal and Florida state laws to rebuild your financial future. Let's clear the air and separate fact from fiction. If you're facing mounting bills, medical debt, or job loss, know that options like Chapter 7 liquidation or Chapter 13 reorganization could be tailored to your situation. Read on to learn why bankruptcy might not be as scary as you think.
Myth #1: Only Financially Irresponsible People File for Bankruptcy
One of the most pervasive myths is that bankruptcy filers are reckless spenders who mismanage money. In reality, most Florida families who file do so due to unforeseen hardships like medical emergencies, job loss, divorce, or economic downturns—think the impacts of hurricanes or the COVID-19 pandemic that hit Brevard County hard.
According to data from Florida bankruptcy courts, a significant portion of filings stem from medical bills, which account for over 60% of personal bankruptcies nationwide. As a Melbourne attorney, I've seen hardworking teachers, space industry workers from Kennedy Space Center, and small business owners in Viera forced into bankruptcy not by poor choices, but by life events. Filing isn't a moral failing; it's a legal right under the U.S. Bankruptcy Code. If you're in Brevard County and struggling, consulting a local expert can show how bankruptcy aligns with responsible financial recovery.
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Myth #2: You'll Lose Everything You Own If You File
Many fear Bankruptcy means surrendering their home, car, and personal belongings. This couldn't be further from the truth in Florida, thanks to generous exemption laws. Under Florida's homestead exemption, you can protect an unlimited value in your primary residence if you've owned it for at least 1,215 days—perfect for long-time Brevard residents.
In Chapter 7, non-exempt assets might be liquidated, but most filers keep essentials like vehicles (up to $1,000 equity), household goods, and retirement accounts. Chapter 13 lets you reorganize debts without losing property. In my practice serving Melbourne and surrounding areas like Cocoa and Rockledge, clients often retain their homes and cars by reaffirming loans or catching up via a repayment plan. Florida's protections ensure you maintain stability while discharging unsecured debts.
Myth #3: Bankruptcy Will Ruin Your Credit Forever
The idea that bankruptcy destroys your credit score permanently keeps many from filing. While it's true that a Chapter 7 Bankruptcy stays on your credit report for 10 years, the impact on your credit score can be almost immediately repaired. In fact, many clients report 700+ credit scores within a year because bankruptcy eliminates high debt-to-income ratios.
Florida families can rebuild credit by using secured cards, paying bills on time, and monitoring reports. Filing can actually boost your credit faster than drowning in missed payments. If you're in Melbourne worrying about long-term effects, remember - lenders view discharged debt more favorably than ongoing defaults.
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Myth #4: You Can't Get Credit or Loans After Bankruptcy
A related myth is that post-bankruptcy life means no loans, mortgages, or credit cards ever again. Not so—many filers qualify for credit soon after. FHA loans in Florida allow mortgages just 2 years after Chapter 7 Discharge, and auto loans are often available immediately, albeit at higher rates initially.
In Brevard County, where housing costs are rising, I've helped clients secure home loans 3-4 years post-filing by demonstrating financial responsibility. Credit rebuilds through consistent behavior, not the bankruptcy itself. Banks understand life happens. They lend based on current stability. Don't let this myth trap you in debt. Bankruptcy can pave the way for better borrowing terms down the line.
Myth #5: You Have to Be Unemployed to File for Bankruptcy
Some believe only the jobless qualify, but that's false. Most filers have steady income; in fact, Chapter 13 requires it for repayment plans. The means test in Florida compares your income to the state median (around $68,000 for a single person in 2026) to determine eligibility for Chapter 7.
High-earners in Melbourne's tech or tourism sectors often opt for Chapter 13 to protect assets while reorganizing debts. I've represented employed families from Satellite Beach to Merritt Island who qualified easily. Employment shows stability, aiding approval. If you have a job but overwhelming debt, bankruptcy could stop garnishments and provide relief without quitting.
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Myth #6: Bankruptcy Discharges All Your Debts
Not all debts vanish in bankruptcy. While Chapter 7 wipes out unsecured ones like credit cards and medical bills, secured debts (mortgages, car loans) remain unless you surrender the asset. Non-dischargeable items include recent taxes, student loans (unless undue hardship proven), child support, and alimony.
In Florida, certain state-specific debts like some fines might stick. However, bankruptcy halts collections and discharges most burdens. For Brevard families, this means relief from harassing calls while addressing priorities. Always consult a local attorney to identify what's dischargeable—I've helped many avoid surprises in court.
Myth #7: If You're Married, Your Spouse Must File Too
Married couples don't have to file jointly. One spouse can file alone if debts are in their name, protecting the other's credit.
For efficiency, joint filings are common in Brevard County to cover shared obligations. If one spouse has separate debt, solo filing works. I've guided couples in Melbourne through this, ensuring minimal impact on the non-filing partner. Discuss your situation to decide—it's not a one-size-fits-all.
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Myth #8: You Can Only File for Bankruptcy Once in Your Lifetime
Repeat filings are allowed, though with waiting periods: 8 years between Chapter 7s, 6 years from Chapter 7 to 13, etc. Florida follows federal rules, and multiple filings aren't uncommon for those hit by recurring crises like natural disasters.
Clients who've filed before often return for advice on timing. In my experience serving Titusville and Palm Bay, strategic refiling provides ongoing protection. Don't assume one filing exhausts your options—life's uncertainties mean bankruptcy can be a recurring tool.
Myth #9: Filing for Bankruptcy Is Too Complicated and Expensive
The process seems daunting, but with an attorney, it's straightforward. Filing fees are about $338 for Chapter 7 and $313 for Chapter 13, plus attorney costs (often $1,000-$3,000 in Florida). Many offer payment plans, and low-income filers waive fees.
In Brevard County, virtual consultations simplify things. I've streamlined filings for Melbourne families, handling paperwork and court appearances. Pro se filings are possible but risky—hiring a bankruptcy attorney helps ensure success.
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Myth #10: You'll Automatically Lose Your Home or Car
Florida's exemptions protect your homestead entirely and vehicle equity up to $5,000 (or more with wildcard exemptions). In Chapter 13, you keep everything while repaying. Even in Chapter 7, reaffirmation agreements let you retain financed assets.
For Brevard homeowners, this means staying in your Melbourne beachside property. I've assisted clients avoiding foreclosure through the Bankruptcy Automatic Stay. If payments are current, loss is rare. Protect your investments. Bankruptcy safeguards, not strips, them.
In conclusion, these myths often stem from outdated info or creditor scare tactics. For Florida families in Brevard County, bankruptcy offers real relief, preserving assets and rebuilding lives. As your local Melbourne bankruptcy attorney, I'm here to guide you through the process with compassion and expertise. Don't let myths hold you back—schedule a free consultation today to explore your options.
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The Bowin Law Group proudly serves many areas in Brevard County, Florida, including Melbourne, West Melbourne, Palm Bay, Melbourne Beach, Viera, Cocoa, Cocoa Beach, Cape Canaveral, Port Saint John, Titusville, Palm Bay, Rockledge, Satellite Beach, Indian Harbour Beach, Indialantic, Merritt Island, and Port Saint John.