Federal bankruptcy laws allow Florida residents who are overwhelmed by debt to make a new start. If you are unable to pay what you owe your creditors, seeking relief under Chapter 7 of the Bankruptcy Code offers a chance to make a fresh start and regain your financial health.
If you are struggling financially, an Orlando Chapter 7 bankruptcy lawyer at Florida Law Advisers, P.A., can review the details of your financial situation and help you determine whether bankruptcy is right for you. There may be other options we can help with as well, such as pursuing an out-of-court settlement agreement with your creditors. If a Chapter 7 bankruptcy is the best option, we can help you file a bankruptcy case in Orlando (Orange County) and use exemptions that Florida law allows to minimize your loss of assets.
Bankruptcy provides protection from creditors. Its availability should not be ignored by anyone facing insurmountable debt during these difficult times. Contact us today to schedule a free consultation with a bankruptcy lawyer at Florida Law Advisers, P.A.
How Does Chapter 7 Bankruptcy Work?
Chapter 7 bankruptcy allows a qualifying individual to discharge large portions of their unmanageable debt while paying some of their creditors. Chapter 7 is also known as liquidation” bankruptcy because some assets might be sold to pay debts. Usually, most or all of a debtor’s personal property is exempt from requirements to be sold.
Filing for bankruptcy under Chapter 7 rules also provides immediate relief from most debt collectors. As soon as your case is filed, most creditors are required to halt all collections activity, including foreclosures, lawsuits, and wage garnishments.
Individuals must qualify for Chapter 7 bankruptcy by passing a means test. There are two ways to qualify:
- Your average income over the most recent six months is less than the state median income for a household of the same size as yours.
- Your projected disposable income for five years after deducting certain expenses allows you to pass. This is a more complicated analysis and usually requires a small charge to prepare.
If you do not qualify under the bankruptcy means test in Florida, you may still qualify for Chapter 7 if you can show the Bankruptcy Court that you have special circumstances that make it necessary and reasonable to adjust your income calculations.
If you qualify, you can file a petition with the bankruptcy court serving the area where you live. The Bankruptcy Court for the Middle District of Florida is in Orlando. You must also file with the court a number of forms, including:
- Lists of your assets and liabilities
- Schedules of current income and expenditures
- A statement of your current financial affairs
- A schedule of current leases and contracts under which obligations remain to be fulfilled by either party
- A schedule of exempt property
- The means test described above.
- A statement of whether you intend to retain or surrender secured property.
If you’re married, you must include a description of your spouse’s income and any property or debts you jointly own, even if your spouse is not a party to the bankruptcy filing.
The court will appoint a bankruptcy trustee to oversee your case. The trustee will look at the paperwork you filed to make sure everything is complete and in order. The trustee will then look for nonexempt property you own that can be sold for money to pay your creditors. If anything can be sold, the trustee will oversee the disposition of these assets and the distribution of the proceeds from the sales to pay your creditors.
The trustee will hold a meeting of your creditors, which you must answer questions under oath about your property and financial affairs. This “Section 341 meeting” is usually the only time you will have to meet with the court or trustee. Currently, these meetings are held by telephone.
You will also be required to complete two educational courses with approved debtor agencies:
- An approved credit counseling briefing within 180 days before filing your bankruptcy petition.
- An approved instructional course concerning personal financial management after filing your case. You must file the Certificate of Completion of the Financial Management Course with the court before any of your debts will be discharged. Otherwise, your case will be closed without a discharge.
Debt That Can Be Discharged in Chapter 7 Bankruptcy
With certain exceptions, which counsel will discuss with you, certain kinds of debt are usually discharged, or forgiven, as part of a Chapter 7 bankruptcy filing, including:
- Medical bills
- Utility bills (but if you continue to use the utility you will likely need a new deposit)
- Credit card debt
- Back rent on properties you have moved out of
- Personal loans
- Overpayment of some government benefits.
Debt that Cannot Be Discharged in Chapter 7 Bankruptcy
Certain types of debts cannot be discharged as part of a Chapter 7 bankruptcy and must be paid. They include:
- Child support
- Spousal support (alimony)
- Certain types of taxes
- Student loans (with some exceptions)
- Some Loans guaranteed by government agencies under specific statutes
- Debts that were specifically excepted from discharged in a previous bankruptcy
- Some Drunk driving (DWI / DUI) debts
- Some debts incurred by willful and malicious injury to another person or entity
Filing for Florida’s Chapter 7 Property Exemptions
Florida law allows you to claim exemptions that shield some of your assets from being sold. They include:
- Your home. Some of the requirements to exempt your home under Florida’s homestead exemption include that, the property can’t be larger than a half-acre if it’s in a municipality or 160 acres if it’s in an unincorporated jurisdiction.
- $1,000 or $4,000 worth of personal property. Florida’s wildcard personal property exemption allows you to choose nonexempt personal property worth up to $1,000 that you want to exclude from sales. If you do not take advantage of the homestead exemption, you can claim a wildcard personal property exemption worth up to $4,000 (or $8,000 for joint filers).
- $1,000 in equity in a motor vehicle. If you have over $1,000 in equity in your car ($2,000 for joint filers), the wildcard exemption may be applied to help keep a car or truck.
- Most Education, hurricane, and health and medical savings accounts.
- Most Pensions and retirement benefits, retirement accounts.
How Often Can You File Chapter 7?
With experienced legal help and counsel, you should be able to regain your financial footing after a Chapter 7 bankruptcy in Florida.
If you have discharged debt in a previous Chapter 7 case, you must wait eight years after filing the prior case before you can seek a discharge of debt under Chapter 7 again. If you were eligible to file for bankruptcy under another chapter of the Bankruptcy Code, discharge might be available to you during that time period.
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Call Our Orlando Chapter 7 Bankruptcy Lawyer
If you have come to the realization that you cannot pay your debts, bankruptcy may be the right tool for you to make a fresh start. The experienced Orlando bankruptcy attorneys at Florida Law Advisers, P.A., can help you make the best financial decisions so you can move forward with your life.
For many individuals with overwhelming financial problems, a Chapter 7 personal bankruptcy proves to be more beneficial than it seems at first. With more than 99% of Chapter 7 bankruptcy filers receiving a discharge, it’s likely that your Chapter 7 bankruptcy will be a success.
Contact Florida Law Advisers today for a free and confidential consultation about your financial situation and the options available to you. Don’t put it off and fall farther behind. We can help you now.