• Chapter 7 Bankruptcy

    click here to view: Chapter 13 Bankruptcy Information |  Chapter 11 Bankruptcy Information

    What is Chapter 7?
    Chapter 7 is what most people think of when they think of bankruptcy. Filing for Chapter 7 is a “liquidation” or a “straight” bankruptcy process that forgives unsecured debts (like credit cards, medical bills and other personal debts).

    Is Filing for Bankruptcy Bad?
    While most people have attached a very negative stigma to filing for a personal liquidation, Chapter 7 bankruptcy, this should no longer be the case. A Chapter 7, if carried out correctly, should not operate to hurt you, rather it should give you a sense of relief, help retain your property and give a you a fresh start.

    Because you can only file bankruptcy once every 8 years or so, credit is not as hard to find as it once was after a successful bankruptcy. Credit card companies have been known to extend to debtors credit even during the bankruptcy process. Companies are willing to extend credit because they know that if a debtor fails to pay after a successful bankruptcy they always have the option of garnishment to be repaid – they can’t lose.

    Not only is your credit not ruined forever, but with the proper counseling, good credit can be established quickly – often within 2 years. It can even be better than what it once was.

    What Happens After I Decide to File?
    Since the BAPCPA, you must first qualify under a Means Test to file a Chapter 7. To automatically qualify, your current monthly income must fall below the Florida adjusted median income. You may still qualify for Chapter 7, however, if your income is above this level. While your unadjusted monthly income might seem higher than the median, certain deductions may be taken from your income to further reduce it below the median.

    After filing the petition debtors enjoy an automatic stay, which arises as an operation of law and acts to prevent almost all creditors from contacting you or attempting to collect. 11 U.S.C. § 362. The automatic stay also prevents creditors from continuing or initiating lawsuits and wage garnishments.

    Many people have been told before that they do not qualify for a Chapter 7 when, in fact, they actually do. Please Call Us about your particular situation.

    If you do not qualify for a Ch. 7, you will still be able to obtain debt relief under Ch. 13.

    What Assets Do I Lose in a Bankruptcy?
    The trustee is able to seize those assets of yours that are not exempt. The trustee can sell everything for value to help pay your creditors. There are many exemptions such as the equity in your home, up to $1,000 of equity in your automobile and up to $1,000 in personal property (or $4,000 if you do not use the Florida Homestead Exemption), please call to discuss your particular situation and property. See below for a list of the exemptions available in Florida:

    Assets Exemption State Statute
    Homestead Real or personal property, including a mobile or modular home: unlimited value for up to ½ acre in a municipality or 160 acres elsewhere. This exemption can be claimed by the spouse and children of a deceased owner. Constitution 10-4; 222.01–222.3, 222.05
    Debtor may file a homestead declaration. 222.01
    Insurance Death benefits: all benefits payable to a specific beneficiary and not to the deceased’s estate. 222.13
    Annuity proceeds, except for lottery winnings: all. 222.14
    Life insurance cash surrender value: all. 222.14
    Illness and disability benefits: all. 222.18
    Fraternal benefit society payments: all. 632.619
    Miscellaneous Child support and alimony: all necessary for support. 222.201
    Damages for injuries to employees in hazardous occupations: all. 769.05
    Pensions federal pension exemptions
    State officer and state employee pensions: all. 121.131
    County officers and county employee pensions: all. 122.15
    Firefighter pensions: all. 175.241
    Police officer pensions: all. 185.25
    IRAs, Roth IRAs, and ERISA-qualified benefits: all. 222.21(2)
    Teacher pensions: all. 238.15
    Personal Property Deposits into prepaid trust for college education: all. 222.22(1)
    Deposits into prepaid medical savings account: all. 222.22(2)
    Deposits prepaid into hurricane savings account: all. 222.22(4)
    Federal income tax refund/credit: all. 222.25
    Health aids: all. 222.25
    Motor vehicle: up to $1,000. 222.25
    Deposits for funeral contract (pre-need): all. 497.56(8)
    Public Benefits Public assistance: all. 222.201
    Social Security benefits: all. 222.201
    Unemployment compensation benefits: all. 222.201; 443.051(2), (3)
    Veterans’ benefits: all. 222.201; 744.626
    Workers’ compensation: all. 440.22
    Crime victims’ compensation: all if the debt is not for treatment of injuries received during the crime. 960.14
    Tools of Your Trade No exemptions.
    Wages Wages for head of family, paid or unpaid: 100% of all wages up to $500 per week; wages deposited into bank account: up to $500 per week for up to 6 months after deposited. 222.11
    Federal government employee pension received 3 months prior to any execution or collection of the funds: all. 222.21
    Wildcard Personal property: up to $1,000 for single person, up to $2,000 for married couple. Constitution 10-4