Bankruptcy In Florida: The Comprehensive Guide

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If you struggle to keep up with your debt, filing for bankruptcy in Florida may be the solution. Bankruptcy allows borrowers to stop all collection efforts and get a fresh start immediately. Phone calls, wage garnishments, foreclosure sales, and collection notices must stop immediately after filing bankruptcy. Bankruptcy also provides a discharge of debt to give people the fresh start they need to rebuild. Filing for bankruptcy in Florida has a lot of benefits, but it is not suitable for every situation. Contact a bankruptcy lawyer in Tampa to schedule a consultation if you are considering bankruptcy.

How Common is Bankruptcy?

Bankruptcy is more common than you may think. In 2018, there were 755,185 bankruptcies filed in the United States. Studies show the average American now has approximately $38,000 in debt. For June 2019, there were 852 new bankruptcy cases filed in Tampa alone. Medical bills are a significant factor in the number of cases filed. A study by the American Journal of Medicine found that 62.1% of all bankruptcy cases are attributable to medical reasons. Further, the study found that 92% of the people filing bankruptcy for medical reasons had over $5,000 in medical debt.

The Three Types of Bankruptcy

Chapter 7: Commonly called liquidation bankruptcy. Chapter 7 involves the sale of non-exempt property to repay creditors. Not everyone is eligible for Chapter 7, as there are specific income limits that you must meet.

Chapter 13: Also known as a reorganization bankruptcy. Chapter 13 involves the creation of a three to five-year payment plan to repay your debts. If you comply with your repayment plan, you should be allowed to keep your property and discharge the debt.

Chapter 11: This type of bankruptcy differs from Chapter 7 and Chapter 13 because it is designed to provide legal aid to struggling businesses and corporations. The company typically continues to operate, but its finances are restructured to maximize its repayment plan to creditors.

Where Do I File Bankruptcy?

Bankruptcy is filed in federal court. However, the bankruptcy procedure is different for individuals and businesses.

Bankruptcy Process for Individuals

The case is usually filed in the district where the borrower lives for individuals. For instance, if you reside in Tampa, you may file the case in the U.S. Middle District of Florida. The residence will be based on the most recent 180 days before filing the case. If there have been multiple residences within the past 180 days, the filing should be where you spent the most time.

Bankruptcy Process for Businesses

Generally, a business should file where the company is located. A corporation’s domicile will be the district where the business is incorporated. A domicile will not change unless a new one is acquired. See In Re Frame. On the other hand, the principal place of business will depend on the facts and circumstances of each case. For instance, many companies conduct business in multiple states and have locations throughout the country. In these types of situations, the principal place of business is the “nerve center “of the business. See In Re Peachtree Lane Associates. The “nerve center” will be where the corporation’s primary business decisions were made within 180 days immediately preceding the bankruptcy.

For cases involving business partnerships, the venue will be based on either the principal place of business or the location of principal assets. Residence or domicile is not a proper basis for venue in bankruptcy cases filed by partnerships. See In Re Willow Ltd. Partnership. Instead, the bankruptcy court will look to the principal place or location of assets. The principal assets of a business are the assets primarily used in the company’s operation. The assets must be related to the business; investments may not be sufficient. See In Re Newport Creamery.

Documents Needed for Chapter 7 and Chapter 13

You will need access to information to complete the bankruptcy forms necessary to initiate the bankruptcy proceeding. Additionally, the bankruptcy trustee will require documents to verify your petition was correct. Therefore, before filing bankruptcy, you should compile the following information:

  • A list of all your creditors, the nature of the debt, the amount owed to each, and their mailing addresses.
  • Your source of income, how often you are paid, and how much you are paid. Additionally, the same income information will be required for your spouse. Your spouse’s information is needed even if your spouse is not filing bankruptcy with you. This is necessary for the court, the trustee, and your creditors to determine your household financial situation.
  • A list of all your property (including real estate and personal items).
  • A detailed list of your monthly living expenses includes food, shelter, clothing, transportation, taxes, medicine, etc. These expenses must be reasonable and necessary for family maintenance.

Can I File Bankruptcy Jointly Without My Spouse?

Under Bankruptcy law, a married couple may file bankruptcy either individually or jointly as a married couple. See Bankruptcy law 11 USC 302. However, because a couple can file a joint bankruptcy, it does not mean they should jointly file bankruptcy. Deciding how to file bankruptcy should not be taken lightly; the decision can have long-lasting effects on your finances. If you need legal advice, you should contact a bankruptcy law firm in Tampa for assistance.

Married couples are the only parties allowed to file for bankruptcy jointly. If a couple intends to file jointly, they should do so in the initial petition. Bankruptcy courts have consistently rejected amendments to add a spouse after the case has been filed. See In Re Clinton. Further, the filing of a joint petition does not automatically entitle the couple to a joint administration or consolidation. Instead, under Bankruptcy Rule 1015, the bankruptcy court has the discretion to deny the joint administration or consolidation. However, joint petitions filed by a married couple are almost always administered jointly unless there is an objection.

Are There Benefits to Filing Bankruptcy With My Spouse?

Exempt property is the property you do not have to forfeit when filing for Chapter 7 bankruptcy. A joint filing may entitle the couple to double the amount of some exemptions. For instance, Florida bankruptcy exemptions for a motor vehicle are only $1,000 in an individual bankruptcy case. However, when filing jointly, the exemption doubles to $2,000. Additionally, the personal property exemption of $1,000 increases to $2,000 when filed jointly. See In Re Hawkins. It is important to note; the remaining exemptions will remain the same and not increase by filing a joint petition. Therefore, a couple filing for bankruptcy in Florida may be able to claim more exemptions by filing separate, individual petitions.

The number of state and federal exemptions you are eligible for may significantly impact whether or not to file jointly. Depending on the circumstances of your case, all of your property may be exempt from bankruptcy. On the other hand, if you file for a Chapter 7 bankruptcy and your property does not qualify for an exemption, the Florida bankruptcy judge may rule that the debtor’s non-exempt assets must be liquidated.

Is Marital Property Safe in Bankruptcy

Under Florida law (689.115), when a married couple jointly purchases a home or other personal property, it is presumed that the property will be held as tenancy by the entireties. In a tenancy by the entireties, the marital union owns the property rather than by the individual spouses. This is an important fact to consider if you contemplate filing bankruptcy when married.

Each party to the marriage has an undivided one-half interest in the marital union, which in turn owns the property. Thus, a creditor of one spouse may not place a lien on property held as a tenancy by the entirety without both spouses agreeing to do so. Therefore, if only one spouse agrees to give property held as tenancy by the entireties to a creditor as collateral for a loan, the creditor will not be able to force a liquidation of the property. Instead, the creditor will only have a lien on that spouse’s one-half interest in the tenancy by the entireties.

Liquidation Requirements for Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as liquidation bankruptcy. In Chapter 7, the borrower may be required to sell certain assets as a case requirement. Fortunately, not all of a debtor’s property will be subjected to liquidation by the bankruptcy court. Florida bankruptcy exemptions are provided for many of the assets a debtor might own. If an asset is exempt from liquidation, the borrower will not be required to sell the asset. Click here to learn more about non-exempt assets and which assets may be protected in bankruptcy.

The Means Test for Chapter 7

To be eligible to file Chapter 7 bankruptcy, you must pass the means test. The means-test requires borrowers to earn below a specified income. The income is based on the median income of similar household sizes. The median income is determined by the U.S. Census and is updated frequently.

The test is designed to weed out those who “need” bankruptcy from those who don’t. It was developed to keep people from abusing Chapter 7 bankruptcy. You only have to pass the means test for Chapter 7 bankruptcy. Borrowers seeking relief under Chapter 13 will not be required to pass the means test. Additionally, the means test may not be applied in your case if you are a disabled veteran. Also, you may be exempt if your debt is primarily business-related debts, as opposed to consumer debts.

Is There a Credit Counseling Class for Bankruptcy

Yes, all borrowers, including those filing for bankruptcy in Florida, are required to take a credit counseling class before submitting their bankruptcy filing. The class must be completed within the 180 days immediately preceding the bankruptcy filing. Once the course is complete, the debtor will need to file a statement of compliance with the bankruptcy court. The statement should include either a certificate or a statement that the debtor received the briefing but does not have a certificate. The certificate of completion should be filed along with your bankruptcy petition. If not included, the case may be rejected by the Court.

The class can be done on an individual basis or conducted in a group setting. Most often, borrowers take the class online from the comfort of their homes. You can usually even use a smartphone or tablet to complete the course. Private companies provide the course, and you can use any company approved by the bankruptcy court. The fee will vary between class providers but is usually around $10.

How Much Does Chapter 7 Bankruptcy Cost?

The Court will charge filing fees for Chapter 7 bankruptcy. The fees will vary by Court. Some may be higher than others. For instance, the filing fee for Chapter 7 bankruptcy in Tampa is $335. If you needed to reopen a closed case, the Court would charge a fee of $260. There may be additional costs for your credit report and credit counseling class. Your lawyer will also charge a fee for their legal services.

How Much Does Chapter 13 Bankruptcy Cost?

As with Chapter 7, the filing fee for Chapter 13 will vary by filing location. For instance, the filing fee for Chapter 13 bankruptcy in Tampa is $310. There will also be fees for the credit report and credit counseling class. Additionally, the Court may charge a $45 fee for a mortgage modification if required. If you need to convert Chapter 13 to Chapter 7, there is a $25 fee.

The fees will be changed occasionally by the Court. You can access the fee schedule for the Middle District of Florida (Tampa Bay area, Jacksonville, and Orlando) by clicking here. For information on the fees charged by the Northern District of Florida (Gainesville, Panama City, Pensacola, and Tallahassee), click here.

Do I Have to Go to Court?

Yes, when a debtor files bankruptcy, they will be required to attend a meeting of the creditors. The meeting of creditors is commonly referred to as the 341 meeting because the meeting is required under section 341 of the bankruptcy code. Failure to attend the meeting can result in your case being dismissed. See In Re Lewis. Debtors can have their bankruptcy lawyer present with them at the meeting. If you filed for bankruptcy, it is strongly recommended to have your bankruptcy attorney present with you.

Are Creditors Required to Attend the 341 Meeting?

Creditors are not required but do have the option of being at the meeting. Usually, if creditors attend, they will hire an attorney to appear on their behalf. However, creditors are generally most concerned with asset evaluation and location. Since most Chapter 7 cases have no assets, the cost of an attorney is usually not beneficial to creditors. If we see creditors at the meeting, they are typically small, personal creditors.

A typical example is family members you borrowed money from. Whether or not these personal creditors decide to show up is much more unpredictable. If creditors attend the 341 Meeting, they will have the right to ask the borrower questions.

When Does the Meeting of Creditors Occur?

Under bankruptcy law, the meeting of the creditors must take place between 20 and 40 days after the order for relief. The debtor will be required to attend the meeting and answer questions of the trustee and creditors under oath. Only creditors and the trustee will be allowed to question the debtor. The bankruptcy judge assigned the case, and equity security holders of a debtor corporation may not attend the meeting of creditors. In most cases, creditors do not attend the 341 meeting, and the trustee will be the only party in attendance. The trustee will typically inquire about the debtor’s income, expenses, assets, and debts. Debtors have the right to have their Tampa bankruptcy lawyer at their side during the meeting. Borrowers should take full advantage of this right to ensure they are not asked improper questions.

The 341 meeting also acts as a deadline for creditors to file complaints to determine the dischargeability of debts. Under Bankruptcy Rule 4007, the complaint must be filed within 60 days after the first date set for the meeting of creditors. If the complaint is not submitted by the deadline of this filing date, the creditor may lose its right to file the complaint.

Preparing for the Meeting of Creditors

An experienced Tampa bankruptcy lawyer will typically spend substantial time preparing his client for the 341 meeting. The trustee will usually question the debtor about the financial information submitted on the bankruptcy petition and schedules. The trustee’s questions will be designed to help determine if the debtor’s bankruptcy paperwork is accurate. The bankruptcy trustee will investigate if the borrower honestly and correctly represented their assets, income, and debts on the bankruptcy petition. Debtors must answer the questions accurately and truthfully at the 341 hearing as the bankruptcy code requires. Providing false information to the trustee or creditors at the 341 meeting can result in criminal charges.

You will need to bring your driver’s license (or other state-issued, non-expired identification) to the meeting. Additionally, you may be required to provide your social security card as well. We suggest arriving early to allow time to find your room and confer with your bankruptcy lawyer. Remember that this is a reasonably informal proceeding, but you will still want to dress professionally and act respectfully in the meeting.

How Long Does the 341 Meeting Last?

The U.S. trustee will oversee the meeting of creditors you have to attend. Often, bankruptcy trustees are expected to schedule five hearings for each half-hour slot on their schedule. This means that typically, these hearings are not lengthy. However, the meeting will be extended if the trustee discovers something that needs further questioning. The trustee can conduct the hearing as long as necessary to resolve any outstanding questions. If necessary, the trustee can even continue the 341 meeting for a later date.

What is the Discharge of Debt?

The goal of bankruptcy is to give borrowers a fresh start. The new start is obtained by discharging the debt. The bankruptcy discharge is a court order releasing the borrower from personal liability on the debt. The discharge prohibits a creditor from taking any collection action against the borrower. In most cases, obtaining a discharge will be the primary reason why a borrower files for Chapter 7 bankruptcy.

Borrowers should be cautious of objections to the bankruptcy discharge. Both the trustee and creditors can raise objections and prevent discharge. The objection can prevent the discharge of a specific debt or all of the debts. The most common objections raised involve acts by the borrower to hinder, delay, or defraud a creditor. Typical examples that may be brought to light by trustees and creditors as potential bankruptcy fraud include hiding or undervaluing assets.

Can I File Bankruptcy Again?

Yes, borrowers can file bankruptcy more than once. However, there may be waiting periods to refile imposed by the Court. The length of the wait will depend on the details of your previous case and the type of new case you intend to file. Additionally, there may be limitations placed on the automatic stay protection. An automatic stay is enacted when a bankruptcy is filed to stop all collection activity immediately. If the previous case was dismissed and you refile within one year, the automatic stay lasts only 30 days. If you had multiple dismissals within one year of your new filing, no automatic stay would be granted.

When Can I File Chapter 7 Bankruptcy?

Bankruptcy filers who previously filed Chapter 7 must wait eight years from the commencement date of their previous case. See Bankruptcy law 11 U.S.C. § 727. The “Commencement Date” is the day you filed your bankruptcy petition with the court. For example, if you filed on October 1, 2010, you would have to wait until October 1, 2018, to file again.

Conversely, if you previously filed for Chapter 13, you only have to wait six years to file Chapter 7. The waiting period will begin on the commencement date of your previous case. Fortunately, there are some exceptions to the 6-year waiting period. If you paid your previous Chapter 13 payment plan in full you might not have to wait the entire six years. Additionally, if you paid 70% of your payment plan in good faith, you may not have to wait to refile.

When Can I File Chapter 13 Bankruptcy Again?

The waiting period to refile Chapter 13 is less than to refile Chapter 7. If you previously obtained a discharge of debt in Chapter 13, you only need to wait two years to refile. On the other hand, if your previous case was a Chapter 7, you will need to wait four years. The 4-year waiting period begins on the commencing date of the last case. Filing a Chapter 13 and Chapter 7 is commonly referred to as Chapter 20.

How Will Bankruptcy Affect My Credit Score?

Credit scores are based on a multitude of factors. One factor that determines the credit score is the amount of debt a person has. Bankruptcy can assist with this by discharging debt a borrower may otherwise be obligated to pay. Another factor is open credit accounts with late payments; these accounts can significantly reduce your credit score. Fortunately, bankruptcy can assist with this aspect as well. If the debt is discharged in bankruptcy, the account should no longer be reported as an open delinquent account. For more information on how bankruptcy affects credit scores and how the score is calculated, click here.

The bankruptcy filing may last on your credit report for a few years. If you completed a Chapter 13 bankruptcy, the filing might remain on your credit report for seven years. On the other hand, Chapter 7 bankruptcy will stay on your credit report for up to 10 years. See

If bankruptcy is on your credit, it does not mean you will be prevented from acquiring new debt. For instance, the waiting period for a mortgage may be a lot sooner. Many car loan lenders will have no waiting period at all; you may get a loan the very next day. The F.H.A. and Veteran’s Association allows borrowers to qualify for a mortgage just two years after the discharge. See F.H.A. Regulation 4155.4.

How Does Debt Settlement Differ From Bankruptcy?

Debt settlement is a process in which you negotiate with your creditors to pay a reduced amount. To explore debt settlement, you need to have an income stream that will enable you to repay your creditors. Most creditors will only accept a settlement if the borrower can show they can afford it. If an agreement is reached, the loan’s remaining balance should be forgiven.

Unlike bankruptcy, you cannot force your creditors to accept less. A debt settlement only occurs if the creditor agrees to the proposal. Essentially, the creditor holds all the cards in debt settlements. Usually, the most considerable risk to the creditor will be the borrower filing bankruptcy. If bankruptcy is filed, the creditor’s power may be limited or non-existent.

Is Bankruptcy Better Than Debt Settlement?

Determining how to handle your debts is not an easy decision. It is essential to evaluate each option carefully to choose the best option. The surest way to achieve this goal is to seek the guidance of a legal expert who knows the pros and cons of debt settlement and Florida bankruptcy. By seeking the services of an experienced Tampa bankruptcy attorney well versed in Florida bankruptcy law, you can help ensure that every angle has been considered during the decision-making process.

Is a Lawyer Required for Bankruptcy or Debt Settlement?

Debt settlement can usually be handled without a private attorney because a court filing is not required. While you can enlist the help of an attorney, you can work directly with your creditors if you wish. There are also third-party debt settlement companies that can negotiate with creditors on your behalf. Keep in mind, you cannot force the creditor into a debt settlement, even if you hire a lawyer.

While it is not required to hire an attorney, it can significantly improve your chances of success. A 2014 study found that only 48.2% of all bankruptcy cases without an attorney received a discharge of debt. Conversely, 82.1% of borrowers who hired a lawyer received a discharge of debt.

There are many reasons you should hire a Florida bankruptcy lawyer to help you eliminate your debts. But not all bankruptcy attorneys are created equal. You should take careful consideration to ensure you retain the right lawyer for your case. Before hiring an attorney, ask the lawyer about their experience and qualifications. You should also do an internet search and research their reviews from previous clients.

5 Star Bankruptcy Attorney in Tampa with Free Consultations

We invite you to contact Florida Law Advisers, P.A., to schedule a free consultation with a Florida bankruptcy attorney at our law firm. We will take the time to review your financial situation to see if bankruptcy is the best option to help you get out of debt. At Florida Law Advisers, P.A., we understand that filing for bankruptcy can be confusing and intimidating. That is why we work so hard to make the bankruptcy process as easy as possible for our clients.

Our Tampa bankruptcy attorneys have years of experience navigating bankruptcy proceedings and providing legal advice to help people solve their financial problems and obtain a fresh start. Regardless, whether you need help with Chapter 13, Chapter 7, or other forms of debt relief, our professional legal team can help—call (800) 990-7763 to speak with a bankruptcy attorney at our firm today.

Frequently Asked Questions

In Chapter 13, the borrower can have up to 5 years to pay off the car loan. This provides time to catch up on payments by spreading the past-due balance over essentially a new 60-month loan. Most often, the interest rate applied is around 6%. In addition to an interest rate reduction, an option known as a “cramdown” can reduce the total loan balance as well.

Chapter 13 allows homeowners to modify their home mortgage. In addition, it may provide up to five years to catch up on missed mortgage payments without additional interest charges.

Each form of bankruptcy provides its unique benefits and disadvantages. You should consult with an attorney to see which type of bankruptcy would best suit your situation.

Yes, when either a Chapter 13 or 7 case is filed, an automatic stay will go into effect. The stay requires creditors to stop all collection activity against you immediately. Creditors and collection agencies will not be able to contact you, garnish wages, or repossess property while the stay is in effect.

Most unsecured debts are discharged in Chapter 7. Unlike secured debts, unsecured debts are loans without collateral, such as credit cards and medical bills.

Florida’s exemption laws provide exceptions to help protect a car’s equity. You may also be able to reduce the balance owed on your car loans without sacrificing the vehicle or other assets.

The Florida homestead exemption protects a filer’s homestead property (primary residence) asset in Chapter 7. Therefore, you may not have to forfeit your home as a condition of bankruptcy.

In 2005, Congress implemented the means test as a requirement for Chapter 7 bankruptcy, requiring Chapter 7 debtors to earn below a specified amount of income to be eligible.

Yes, you will be required to attend the meeting of creditors. Often, creditors do not attend, and the only parties in attendance are the bankruptcy trustee, debtor, and debtor’s attorney. The hearing usually occurs about 30 days after the case is filed.

A Chapter 7 bankruptcy case takes about 90 – 120 days to complete after it is filed. On the other hand, a Chapter 13 bankruptcy case is designed to last 3 – 5 years.

Yes, you will be required to take a credit counseling class before filing either Chapter 7 or Chapter 13 bankruptcy. An additional credit counseling course will also need to be taken after filing the case. Both courses can be completed online from the comfort of your home.

There is no minimum amount of debt required to file bankruptcy in Florida. However, the costs to file for bankruptcy typically range between $1,500 – $2,500. Therefore, you should have at least more debt than it costs to file for bankruptcy. Otherwise, the costs may outweigh the benefit.

Unfortunately, banks usually reserve the right to cancel credit card accounts at any time. Therefore, they can close your account regardless of whether you file for bankruptcy or not. Additionally, you will likely not be able to force a credit card company to keep the account open if they insist on closing it.

Most unsecured debts are discharged in Chapter 7 bankruptcy. While secured debt requires collateral to support a loan, such as property, unsecured debt refers to loans that don’t have collateral, like credit cards and medical bills. Whether you are current on your monthly payments or not, you will still be eligible to have your unsecured debts discharged.

Chapter 13 is considered a restructuring bankruptcy because the debtor makes payments to their creditors according to a court-approved payment plan. On the other hand, Chapter 7 does not involve a payment plan. Instead of making monthly payments, the bankruptcy trustee will liquidate non-exempt assets to pay creditors.

Yes, an automatic stay is implemented as soon as a Chapter 7 or Chapter 13 bankruptcy is filed. The automatic stay will immediately stop all debt collection harassment, including foreclosure auctions.

A bankruptcy lawyer can ensure your rights are protected and help prevent the many pitfalls of bankruptcy. It is highly recommended to obtain an attorney, but filing Chapter 7 or Chapter 13 bankruptcy is not necessary.

Many car loan lenders and other financial institutions have no required waiting period for a new loan after bankruptcy. The government-sponsored mortgage programs with F.H.A., Veteran Affairs, and Fannie Mae require a borrower to wait two years before becoming eligible for a mortgage.

A wage garnishment does not necessarily prevent you from a settlement. However, garnishment makes negotiations difficult because the bank may not have the incentive to accept less money. Generally, it is best to dismiss a garnishment before attempting debt settlement.

At Florida Law Advisers, P.A., we are committed to solving your divorce, bankruptcy, and immigration matters. We are a full-service law firm serving clients in Tampa, Hillsborough County, Orlando, and throughout Central Florida.