Filing Chapter 7 Bankruptcy in South Florida
What Does Filing Chapter 7 Bankruptcy Mean?
Chapter 7 Bankruptcy, also known as liquidation bankruptcy, is designed to protect debtors by eliminating most unsecured debt. This provides you with an opportunity to start fresh and take control of your financial future. Although it can be the most straightforward of all bankruptcy options, it is a complicated process.
Types of Debt that are Not Dischargeable
- Student loan debt
- Alimony or child support debt
- Debts from certain types of taxes
- Certain types of court and attorney fees
How Do You Know if you Qualify for Chapter 7 Bankruptcy?
Not all individuals qualify for debt relief under Chapter 7 bankruptcy laws. The first step in determining if you are eligible is to take a “means test”. This test, based on recent median household income levels, calculates whether you have the means to repay all or a small portion of your debt. If your most recent six months of income falls below the median income level set for your household size, you will qualify for Chapter 7 bankruptcy.
What Are The Advantages of Filing Chapter 7 Bankruptcy?
- Within 4 months, your debt will be discharged and you can begin rebuilding your credit
- There is no minimum or maximum amount of debt required to file
- Debtor will no longer be liable for most debts and can keep future income
- There is no mandated repayment plan
- Creditors know you can only do this once every 8 years, so they will be more likely to allow you to obtain credit cards again
- Generally you do not have any debt – your income can now be used for new debt
- In most cases, it will not have a negative effect on your credit score
- Generally, you will be able to keep your vehicle
- You will be able to keep your home (Florida has an unlimited homestead exemption)
Process: Once You File Chapter 7 Bankruptcy:
Takes roughly 4 months
- During the Chapter 7 bankruptcy process, a court-appointed trustee will investigate any assets that you own that can be liquidated or sold, with the proceeds being used to pay off creditors.
- Not all assets are required to be used to pay off your debt. Certain exempt assets are yours to keep and cannot be liquidated during the Chapter 7 process. Non-exempt assets will be liquidated by the trustee and the proceeds will be distributed to creditors according to statutes that are established by South Florida bankruptcy law. To get a better idea of the types of assets that may be exempt from liquidation, view our page on “Exempt Assets”.
How Does Filing Chapter 7 Bankruptcy Affect Your Credit Report?
Chapter 7 can stay on your credit report for up to 10 years. However, there are programs to help rebuild your credit score immediately after your bankruptcy is completed.
Differences Between Chapter 7 Bankruptcy and Chapter 13
Chapter 7 Bankruptcy
- No mandated repayment plan
- Can refile every 8 years
- In most cases, debt is discharged after 4 months
Chapter 13 Bankruptcy
- Debt readjustment payment plan that can last 3-5 years
- Credit strengthens while repaying debt
- Can refile after 2 years
How Klein Law Group Can Help
If you are seeking legal guidance for Chapter 7 bankruptcy, our attorneys can assist individuals and businesses that are struggling with debt. We understand that this is a difficult time, we can provide the help and support that you need in order to get the best outcome. To receive a free consultation from one of our knowledgeable and experienced bankruptcy attorneys, call (561) 353-2800.