Chapter 7 Bankruptcy
Chapter 7 Bankruptcy offers those who are overwhelmed with debt a chance to start over. Once the bankruptcy process completes, which lasts 3-4 months, all eligible debts are forgiven or "discharged" - meaning that the filer won't have to pay these debts.
Also, immediately after filing for Chapter 7 Bankruptcy, all creditor collection attempts must cease, including wage garnishment, car repossession, and home foreclosure proceedings.
A bankruptcy attorney typically examines his or her client's entire financial situation, including all assets, debt-to-income ratio, and equity in a home or car, before advising on whether or not Chapter 7 Bankruptcy is the right choice for the client.
Debts Discharged with Chapter 7 Bankruptcy
Chapter 7 Bankruptcy results in the following types of debt being discharged completely:
- credit card debt,
- medical bills,
- civil judgements,
- deficiencies owed because of foreclosure,
- personal loans.
For many filers, the discharging of these debts is sufficient to eliminate all debts.
Debts Ineligible for Chapter 7 Bankruptcy
Some debts cannot be discharged with Chapter 7 Bankruptcy, including:
- child support,
- divorce-related debts owed to an ex-spouse,
- student loans,
- federal and state taxes.
Also, recent debts within 6 months of filing for bankruptcy may not be discharged, such as credit card purchases for luxury items.
Schedule an Appointment with an Attorney
Fill out our quick form to make an appointment with a bankruptcy attorney.
Your information will be kept confidential, and your inquiry will be replied to quickly.
Eligibility to File Chapter 7
There are several eligibility requirements to file Chapter 7 Bankruptcy, which pertain to the filer's income, living expenses, and debts.
If a filer earns more money that the average same-size household in Florida does, for example, he or she may have to take a "means test" to determine if Chapter 13 Bankruptcy would be a fairer solution for the creditors involved.
A bankruptcy attorney can advise on which type of bankruptcy is better for the consumer, and explain the eligibility requirements.
Florida Bankruptcy Exemptions
Florida law allows various "exemptions" - items that can be protected from creditors when filing bankruptcy. The Florida Exemptions include:
- any personal property up to $1,000,
- motor vehicle up to $1,000,
- wages up to $750 per week.
Protecting Your Home and Car
Florida law allows a generous homestead exemption: a filer can protect an unlimited amount of value in a home, as long as the property is not larger than 160 acres.
For cars, up to $1,000 of equity is exempt under Florida's Bankruptcy exemptions.
Also, the act of filing for Chapter 7 Bankruptcy immediately puts a stop to any car repossession or home foreclosure efforts while the Bankruptcy Court determines how the debts will be handled.