(LAKELAND, Fla.) - In the wake of a disaster, it takes a lot of effort for low-income communities to get back on their feet. When you’re already struggling to make ends meet, the financial hurdles that come after a disaster can be insurmountable. Many find themselves in a situation where they are unable to pay their debts and face the decision of whether to file for bankruptcy.

Although bankruptcy may offer disaster survivors the chance for a fresh start, it comes with long-term implications that shouldn’t be taken lightly. Individuals considering filing should understand what bankruptcy can do, the ways it can harm you, and what the process requires. Legal Services Corporation (LSC) makes it easy to access this information on their Legal
Aid Disaster Resource Center (LADRC) website.

Here's what you should know:

What types of bankruptcy are available?

You may be able to get free legal services for either Chapter 7 or Chapter 13 bankruptcy.

Chapter 7 bankruptcy asks the court to discharge some of the debts you owe, meaning no one can try to collect money from you. This can apply to credit card debt, medical bills, and utility bills.

Chapter 13 bankruptcy is a way of restructuring debt meaning you’ll have a new plan which allows for smaller payments over a longer time period. Chapter 13 differs from Chapter 7 bankruptcy because you will still have debts after filing.

Why can bankruptcy be harmful?

The benefits of bankruptcy also come with negative implications including:

• Negatively impacting your credit score for as long as 10 years making it difficult to get new loans or credit cards
• Possibly losing some of your belongings to help pay off yourdebts
• Your take-home pay may be lowered due to Chapter 13 payment plans often involve taking money out of your paycheck to make your new payments

When deciding if bankruptcy is the right choice for you, consider the amount of money you owe, the type of debt you owe, items you might lose if you do not file, and whether you are “judgement proof” or “collection proof” meaning you don’t have anything for a creditor to collect, even if they sue you and win.

It’s recommended to speak with an attorney if you’re unsure. Florida Rural Legal Services (FRLS) can help you determine the right path for you. For additional information contact us at 1-888-582-3410 or visit FRLS.org/hurricane-services to access LSC’s LADRC website.

About Florida Rural Legal Services (FRLS)

Florida Rural Legal Services, Inc. (FRLS) is a non-profit law firm that provides free civil legal aid to qualified individuals, families, and vulnerable communities across 13 Florida counties and to farmworkers statewide. Since 1966, FRLS has pursued justice by providing legal services in
housing law, family law, consumer protection, public benefits, elder law, disaster relief, education law, tax advocacy, and more, all at no cost to our clients. FRLS collaborates with community organizations and pro bono attorneys to deliver quality advocacy, outreach, and education designed to protect the rights of those in need. For over 50 years, FRLS has been a steadfast advocate for justice. Learn more at www.FRLS.org.