Debts that cannot be discharged in bankruptcy

If a debt is discharged in bankruptcy the borrower (debtor) will be released from all personal liability on the debt. Further, the bankruptcy 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 bankruptcy. However, there are many types of debts that cannot be discharged in bankruptcy. Therefore, it is important to seek the advice and counsel of a bankruptcy attorney in Tampa when pursuing relief from Chapter 7 or Chapter 13.  A bankruptcy law firm in Tampa can help advise on the debts that cannot be discharged in bankruptcy and help you get a fresh start with a successful Chapter 7 or Chapter 13.

Secured Debts that Cannot be Discharged in Bankruptcy:

Debt is categorized into two types: secured and unsecured. First, think of secured debt as something tangible (i.e., a home or a car). A secured creditor is one who has a specific piece of collateral securing debt. That creditor may be able to take that collateral back once you file bankruptcy in order to get paid. In Chapter 7 and 13, the value of a secured debt on personal property is determined by the replacement value of that piece of property as of the date you file your bankruptcy petition. See bankruptcy law 11 U.S.C. 506(a)(2).  Secured debts may be discharged in bankruptcy but it is likely a lien will remain on the collateral securing the loan.

Additionally, secured debt/creditors have first priority in being paid back through your bankruptcy estate over other creditors, but they are not known as “priority secured creditors” because no such title exists. The term “priority” only applies to unsecured debt, as discussed below. For more information on the priority of a specific debt contact a bankruptcy lawyer in your area.

Unsecured Debts that Cannot be Discharged in Bankruptcy:

Unsecured debts are loans that do not have collateral which can be physically taken away from you and sold (such as credit card debt, medical bills, student loans, alimony, child support, etc.).  Additionally, there are two forms of unsecured debt: priority and general (also known as “nonpriority”).

Priority unsecured debts are ones that the Bankruptcy Code gives special protection to; they will be paid first among all the other unsecured creditors (but they do not have priority over secured debt/creditors). See bankruptcy law 11 U.S.C. § 507. Examples of priority unsecured debt are child support and alimony, administrative expenses (such as taxes and fines), governmental claims (such as income tax for at least three filings, property tax for the last year, and employment tax for the past three years), FDIC claims, and property claims. Typically, priority unsecured debts will not be discharged in bankruptcy. Conversely, most nonpriority unsecured debts are eligible for a discharge in Chapter 7 or Chapter 13.

NonPriority Unsecured Debts in Bankruptcy

General (or “nonpriority”) unsecured debt are ones that will likely not get paid anything over the course of your bankruptcy and will ultimately be discharged (unless if it is one of the nondischargeable, general unsecured debts, such as student loans). Properly classifying debts can be complicated, if you need assistance contact a bankruptcy attorney for help.

 

Bankruptcy Law Firm in the Tampa Bay Area

If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A. may be able to help. We are a customer service oriented Tampa bankruptcy law firm, committed to  providing personalized attention and dedicated legal counsel. All of our initial consultations are free and convenient payment plans are always available. Regardless, if you need help with Chapter 13, Chapter 7, or other debt relief our professional legal team will provide you with competent legal advice you can trust. Call us now at 800 990 7763 to speak with a Tampa bankruptcy lawyer.

Costs to File Chapter 7

If you are overwhelmed with debt, filing for bankruptcy may help bring some much needed relief. However, bankruptcy is not right for everyone and you should consult with a Tampa bankruptcy attorney before taking action. If you decide to move forward with bankruptcy there will be some requirements you have to satisfy prior to the bankruptcy court accepting your petition. Additionally, there will likely be costs to file Chapter 7,  which must be paid prior to filing your case.  For more information on the costs to file Chapter 7 or Chapter 13 bankruptcy contact a bankruptcy law firm in Tampa.

Costs to File Chapter 7 Bankruptcy

In Florida, there are filing fees associated with filing either Chapter 7 or 13, no matter which area of Florida you file your case in. Filing fees in the Northern, Middle, and Southern Districts of Florida will all be the same, since it is federal law. Keep in mind that these filing costs are separate from any attorneys’ fees if you choose to hire a bankruptcy attorney to handle your case. The filing fee for a new Chapter 7 case is $335, and to reopen a Chapter 7 case, the fee is $260. If you want to convert your Chapter 7 business case to Chapter 11, there is a $922 conversion fee.

Costs to File Chapter 13 Bankruptcy

The filing fee for a new Chapter 13 case is $310, and $235 reopen a Chapter 13 case. If you want to convert your Chapter 13 case to Chapter 7, there is a $25 conversion fee. You can access the fee schedule for the Middle District of Florida (Tampa Bay area, Jacksonville, and Orlando) at http://www.flmb.uscourts.gov/filingfees/, for the Northern District of Florida (Gainesville, Panama City, Pensacola, and Tallahassee) at http://www.flnb.uscourts.gov/sites/default/files/filing_fees/filing_fees.pdf, and the Southern District of Florida (West Palm Beach, Fort Lauderdale, and Miami) at http://www.flsb.uscourts.gov/wp-content/uploads/LRFG/Clerks_Instructions/Clerks_Summary_of_Fees_(CI-2).pdf.

Credit Counseling Course Requirement for Chapter 7 and Chapter 13

Whether you file chapter 7 or chapter 13, you must complete a “credit counseling course” within180 days prior to filing. Bankruptcy judges are very strict with this requirement. If you take the course more than 180 days prior to filing, the court will make you take the course again. A bankruptcy attorney in Tampa can help you locate schools approved by the Court in your area.

Documents for Chapter 7 and Chapter 13

Additionally, prior to filing bankruptcy, you should compile the following information and documents:

  • 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 required in order 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, such as food, shelter, clothing, transportation, taxes, medicine, etc. These expenses must be reasonable and necessary for family maintenance.

 

Bankruptcy Law Firm

If you have questions about the costs to file Chapter 7 call us for help. At Florida Law Advisers, P.A. we understand that filing for bankruptcy can be a very confusing and intimidating process.  That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you get an experienced Tampa bankruptcy lawyer by your side throughout every phase of the bankruptcy process. We will help ensure your rights are protected and keep you well-informed every step of the way. To schedule a free consultation with a bankruptcy lawyer in Tampa call us today at 800 990 7763.

What Happens to Assets When Filing Bankruptcy

Bankruptcy clients commonly ask us what happens to assets when filing bankruptcy. When you file bankruptcy, you will hear the phrase “property of the estate” a lot.  This means that everything you have a legal or equitable interest in as of the date you file your petition will belong to the bankruptcy estate.  See U.S. v. Whiting Pools. If you have assets that are property of the estate, you run the risk of being forced to liquidate the assets in Chapter 7. Therefore, you should consult with a bankruptcy attorney before taking legal action. Bankruptcy can be very helpful but it requires careful planning and knowledge of bankruptcy law. A bankruptcy attorney in Tampa can help you get the most relief possible while protecting your assts.

What Happens to Assets When Filing Bankruptcy – Equitable Interest

What happens to assets when filing bankruptcy if you do not possess the asset? Even if you do not physically possess a piece of property that you own at the time you file your petition.For example, your sister uses a vehicle that you own outright and you never drive it, that asset may still be property of the estate, even though you do not physically have it any longer.  Another example of something you may have a legal or equitable interest in as of the date you file your petition, is if you work pre-petition (meaning before you file bankruptcy), and you earn that income post-petition (after you file your petition), that income is property of the estate and belongs to the trustee because you had legal and equitable rights to that income prior to filing your petition.

Property of the Estate

Determining which assets may be considered property of the estate in a Chapter 7 or Chapter 13 case requires careful consideration. It is highly recommended to consult with a  bankruptcy attorney in Tampa before taking action. Failure to properly plan for your bankruptcy may have devastating consequences. For instance, if you were to file Chapter 13 bankruptcy, everything you purchase post-petition will be property of the estate because the whole point of Chapter 13 is to bring in post-petition assets to help reorganize and repay your debt.

In either a Chapter 7 or 13, if you inherit money within 6 months after filing your bankruptcy petition, that money becomes property of the estate as well and you may not have a right to keep it.  However, there are several items that never become property of the bankruptcy estate and you get to keep.  These items include: funds in an individual retirement account, no later than 365 days before the filing of your petition; employee benefit plans; health insurance plans regulated by state law; any interest you may have as a lessee under a lease of nonresidential property; deferred compensation plans; and tax-deferred annuity.

Also, if you work post-petition and earn income post-petition, that income you earned is not property of the estate; you get to keep it.  See bankruptcy law 11 USC 541. For more information on what happens to assets when filing bankruptcy contact a bankruptcy law firm in your area.

Bankruptcy Law Firm in Tampa

If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A. may be able to help. Florida Law Advisers, P.A. is a customer service based law firm committed to  providing personalized attention and dedicated legal counsel. Our Tampa bankruptcy lawyers have years of experience helping people just like you solve their financial problems and obtain a fresh start. For a free, initial consultation contact us today at 800 990 7763 or complete the free case review inquiry.

Chapter 7 process

The Chapter 7 process is the shortest termed bankruptcy that you can file.  A Chapter 7 case typically takes about 90 days, depending on how many assets and creditors you have.  If you have several assets, your case may take longer because the trustee may need to investigate them more closely. Regardless, a bankruptcy attorney can expedite the Chapter 7 process and help you obtain a fresh start. For more information, you should contact a bankruptcy attorney in Tampafor specifics about your circumstances.

The First Step in Chapter 7 Process

The first step in the Chapter 7 process is to complete a credit counseling course.  This course must be completed 180 days prior to filing the petition for Chapter 7.  There are numerous pre-approved agencies that offer this course. You can find a list of approved agencies in in Florida by going here: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111. A bankruptcy attorney in Tampa can also provide advice on which local agencies offer the course.

The Chapter 7 Petition

The second step in the Chapter 7 process is to file a voluntary petition for Chapter 7 and accompanying schedules.  Your schedules are an organized and compilation of your assets, debts, income and expenses, etc.  It is very important to make sure the petition and schedules are done correctly. If you have any doubts about how to properly complete the documents contact a bankruptcy lawyer for advice right away.

Once you have filed your petition, an “automatic stay” will take effect, which stops all collection actions against you.  For example, if you have a foreclosure sale pending on your home, once you file your petition, the creditor must stop its foreclosure efforts due to the automatic stay that has been put into place by the bankruptcy court. The automatic stay may also immediately stop a court ordered wage garnishment without the need for additional court hearings.

The Meeting of Creditors

Next step in the Chapter 7 process is to attend a 341 Meeting of Creditors. This is a meeting that your trustee will set (and you must attend) as a way for him or her and your creditors to ask you any questions they wish, under oath, regarding your petition and schedules.  See bankruptcy law 11 U.S.C. § 341.  Creditors rarely attend the 341 Meeting. Clients normally don’t need to worry about a bunch of bank representatives or attorneys attending.  If any creditors do show up, they are usually individuals (like an ex-spouse, family member, or friend) who you owe money to and want their voice to be heard. You also have the right to have your bankruptcy lawyer present with you at the 341 Meeting.

Proof of Claims

After you attend your 341 Meeting, creditors must file their “proof of claim” forms within 90 days of your first scheduled 341 Meeting.  This is a form that unsecured creditors must complete and file with the court in order to receive any money from your bankruptcy.  If they do not file a timely proof of claim, then they lose their claim and will not be paid.

Liquidation by the Trustee

The next step in the Chapter 7 process will be for the trustee in your case to collect any of your non-exempt assets, auction them off, and distribute the proceeds from that sale amongst your creditors who filed valid proof of claims. Exempt property is property that you do not have to forfeit when filing for bankruptcy and are entitled to keep. Before you file for bankruptcy or take any other debt relief measure it is important to know which exemptions you qualify for. The amount and type of exemptions you are eligible for may greatly impact your decision on whether or not to file for bankruptcy, and if so either Chapter 13 or Chapter 7.

Depending on the circumstances of your case all of your property may be exempt from the bankruptcy. On the other hand, you may be forced to liquidate precious assets if you file for Chapter 7 bankruptcy and your property does not qualify for an exemption. Contact a  bankruptcy attorney for help in determining what property of yours may qualify for an exemption and which property may be subject to liquidation

The Final Step of the Chapter 7 Process

After completion, the debt will be discharged forever and there is nothing creditors can do about it.  Remember, there are certain debts that are non-dischargeable, such as child support, alimony, and student loan debt.  After receiving adischarge, you can choose to pay back any debt voluntarily, but you cannot be forced to do so by any creditors.  If creditors start calling you again after you receive your discharge, you may have a legal remedy against those creditors.

Bankruptcy Law Firm

At Florida Law Advisers, P.A. we understand that the Chapter 7 process can be a very confusing and intimidating process.  That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you get an experienced Tampa bankruptcy lawyer by your side throughout every phase of the bankruptcy process. To schedule a free consultation with a bankruptcy lawyer in Tampa call us today at 800 990 7763

How to pass the means test

In order to be eligible to file Chapter 7 bankruptcy, you must pass the means test. In its simplest form, the means-test is a way to separate out those who “need” bankruptcy from those who don’t.  It was developed to keep people from abusing Chapter 7 Bankruptcy protection.  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 or if your debt is primarily business-related debts as opposed to consumer debts.

Trying to figure out how to pass the means test can be very complicated. As such, it is important to consult with a Tampa bankruptcy lawyer before deciding that the Means Test will or will not disqualify you from filing a successful bankruptcy case. A bankruptcy attorney may be willing to offer a free consultation to help determine your eligibility for Chapter 7.

The First Step to Pass the Means Test

Part-One of the trying to pass the means test involves looking at the average income of the debtor. Under some circumstances, the spouses income may be considered as well. The Court will look at the average income, which it will calculate by looking at the average monthly over the last six-months, then multiplying that figure by twelve (to account for one year of income) to determine if you pass the means test.  The Court will then look at that number compared to the state median income.  If your income is below the median income, you would finish and there would be no presumption of abuse.  See bankruptcy law 707(b)2.

How to Pass the Means Test If Your Income is Above the State Median Income

If your income is above the national median, you would need to continue to Part-Two of the means test.  At this time, the Court will evaluate your income after considering some allowable deductions.  This part of the test is very complicated:  some of the allowable deductions are established through the IRS code, others still through the census bureau.  This is where it becomes even more important to consult not just with an attorney, but an experienced Chapter 7 bankruptcy attorney.  An experienced bankruptcy attorney can use the IRS Code, Bankruptcy Law, Census data, and other information to help you pass the means test.

Presumption of Abuse

Part-Two involves the Court trying to uncover your true disposable income. See bankruptcy case Ransom v. FIA Card Services.  If the income is over the state-median income after deductions, there will be a presumption of abuse.  A presumption is like an assumption, but one with legal ramifications and that presumption must be overcome with evidence; without evidence a presumption will stand as if fact.  Should there be a presumption of abuse in your case, you will be required to give details about an exigent or special circumstances that justify your need for Chapter 7 and or specifics about your financial situation (income, debts, or assets.)  Additionally, you may be required to attest to the accuracy of this information.  See Official Form 122A-2.

Some things that might help you overcome this presumption would be recent loss of job, a one-time bonus effecting income which is not likely to continue, a recent influx in self-employment income not likely to repeat, etc.  It is important to remember that even if you find yourself in a situation where the presumption of abuse applies, you can still pass the means test.  Further, even if you cannot overcome the presumption, Chapter 13 may be a viable option.  Even further, the timing of your filing may affect your Means Test results.  Therefore, an experienced Tampa bankruptcy attorney can help you decide when is a good time to file in your individual circumstance, as well as which bankruptcy filing (Chapter 7 or 13) will be most advantageous in your circumstances.

Tampa Bankruptcy Law Firm

At Florida Law Advisers, P.A. we understand that filing for bankruptcy can be a very confusing and intimidating process.  That is why we work so hard to make the process as easy as possible for our clients. Regardless, if you need help with Chapter 7 or Chapter 13, we will assist with compassion. To schedule a free consultation with a bankruptcy lawyer in Tampa call us today at 800 990 7763.