Chapter 7 Bankruptcy in Florida

If you live in Florida and are considering filing for chapter 7 bankruptcy, the bankruptcy process can be very confusing and time-consuming. This blog is a simple primer on filing bankruptcy - but remember we are not legal experts and are not offering any advice. You should speak with a bankruptcy attorney before considering a bankruptcy filing.

We will also outline some chapter 7 bankruptcy alternatives available in the sunshine state of Florida.

Chapter 7 Bankruptcy in Florida

There are several different types of bankruptcy and each is named for the chapter of the bankruptcy code that defines them. Chapter 7 is probably the most common type, closely followed by Chapter 13, the reorganization bankruptcy.

In Chapter 7, you must meet a bankruptcy means test. In this case, most debt, especially unsecured debt, is erased. If you cannot qualify, Chapter 13 may be your option.

The means test is a comparison of the last 6 months of your household's average monthly income to the median income of a similar-sized household. You can check your qualification using a calculator here.

There are many expenses that can be claimed, and this is where a qualified bankruptcy attorney may be able to help you.

How to file for Chapter 7 bankruptcy in Florida

There are several steps that you must accomplish to file for bankruptcy. The first is to complete an approved credit counseling course with an approved agency within 6 months of filing the bankruptcy petition. You must submit the certificate of completion in your petition.

Next, assemble your bankruptcy petition. This details your income, debt, and property for the past 10 years. A list of all bankruptcy forms is included below along. Bear in mind that each state may have additional bankruptcy forms or formats, so always ask the clerk of court for your bankruptcy court.

Your petition will be turned over to a bankruptcy trustee who will call a 341 Creditor meeting. Your creditors may appear but usually do not. The bankruptcy trustee will ask questions about your bankruptcy paperwork.

Bankruptcy trustees do the work of selling assets to repay creditors and get your unsecured debts discharged. Before bankruptcy discharge can be granted, you complete the personal debtor's education course or financial management course and file bankruptcy Form 23.

The costs associated with filing for Chapter 7 bankruptcy in Florida

Costs for filing for Chapter 7 are set by federal law. As of 2022, the filing fee is $338. If you hire bankruptcy attorneys, costs may be much higher. If you cannot pay the filing fee outright, you can petition for forgiveness or a payment plan.

The benefits of filing for Chapter 7 bankruptcy in Florida

Filing bankruptcy can make sense. It depends on your unique situation. Most people want a fresh financial start to filing for bankruptcy.

Another benefit is that Chapter 7 allows you to keep future earnings. Other types may result in wage garnishment.

There is no limit on the amount or number of consumer debts claimed and no repayment plan.

Finally, Chapter 7 also only takes about 3 months to complete.

The drawbacks of filing for Chapter 7 bankruptcy in Florida

There are some drawbacks to filing for Chapter 7 bankruptcy. Going through bankruptcy will damage your credit report for up to ten years.

Not every debt is discharged - non-dischargeable debts include alimony and child support, tax debt, student loans, and some personal injury debts.

You may lose your real or personal property in order to repay your debts. There are homestead exemptions, so check into those to be able to keep some of your real property.

The costs can be quite high, especially if you hire a Florida bankruptcy lawyer. In addition, there is a social stigma surrounding bankruptcy.

If you cannot qualify under the means test, your bankruptcy case may be converted to Chapter 13 or dismissed.

How to prepare for a Chapter 7 bankruptcy hearing in Florida

Your first step to filing chapter 7 bankruptcy

Determine which federal bankruptcy court will handle your petition. This is based on the following criteria:

• the location where you maintained a permanent residence for 180 days before filing, or
• the location of your principal place of business or where your assets were for those 180 days, or
• the location where you spent the greater portion of those 180 days if you moved recently.

Go to the U. S. Court Locator, enter your city and state or zip code, and select "bankruptcy court" for your appropriate location.

Your Second Step to filing chapter 7 bankruptcy

Next, complete the approved credit counseling course.

Your Third Step to filing chapter 7 bankruptcy

Complete the bankruptcy paperwork.

Mandatory Bankruptcy Forms

• Form 101 (“Voluntary Petition for Individuals Filing Bankruptcy”)
• Certificate of credit counseling completion
• Form 106Sum (Summary of Your Assets and Liabilities and Certain Statistical Information) includes current monthly income and debts.
• Form 106A/B (Schedule A/B: Property) lists all belongings and their sale value
• Form 106C (“Schedule C”) details what property is protected by an exemption
• Form 106D (Schedule D: Creditors Who Hold Claims Secured By Property (individuals)) lists secured debts
• Form 106E/F (Schedule E/F: Creditors Who Have Unsecured Claims (individuals)) details all other monies owed
• Form 106G (Executory Contracts and Unexpired Leases (individuals)) includes long-term contracts like home rentals and car leases
• Form 106H (Schedule H: Your Codebtors) must be filed regardless of co-debtors
• Form 106I (Schedule I) lists all income, including monthly income
• Form 106J (Your Expenses (individuals)) includes your monthly expenses, including your living expenses. You must be able to make your household expenses. Be honest but remember you do not want to show a lot of disposable income left.
• Form 106Dect (Declaration About an Individual Debtor’s Schedules), the signature page
• Form 107 (Your Statement of Financial Affairs for Individuals Filing for Bankruptcy) covers information not part of the schedules, including pending legal actions
• Form 122A-1 (“Chapter 7 Statement of Your Current Monthly Income”) is the means test calculation
• List of all creditors and addresses
• $338 filing fee

Bankruptcy forms depending on the unique situation:

• Official Form 103B (Application to Have the Chapter 7 Filing Fee Waived) if household income is less than 150% of the federal poverty guidelines for your household size
• Official Form 103A (Application for Individuals to Pay the Filing Fee in Installments) allows for a fee payment plan
• Official Form 121 discloses your full social security number. Do not include in the packet, or it is included in public filings
• Official Form 108 (Statement of Intention for Individuals Filing Under Chapter 7) instructs your bank about secured loans or unexpired contracts
• Official Form 122A-2 (Chapter Means Test Calculation)
• Official Form 122A-1Supp (Statement of Exemption from Presumption of Abuse under §707(b)(2)) if not required to complete a means test because debt is non-consumer or based on active duty military service
• Official Form 106J-2 (Schedule J-2: Expenses for Separate Household of Debtor 2) for a married couple filing a joint petition but not living together
• Official Form 101A (an eviction judgment against you) if you are behind on rent and there is a judgment to evict you
• Official Form 101B if you want to stay in your home for 30+ days after filing

Your Fourth Step to filing chapter 7 bankruptcy

Turn in your petition.

The guidance of a Florida law firm through Florida bankruptcy laws may be very important.

What happens after you file for Chapter 7 bankruptcy in Florida

The bankruptcy procedure is fairly straightforward if complex. Once you file your bankruptcy petition, the bankruptcy court notifies creditors of an automatic stay. This prohibits (most of) them from taking collection actions. They cannot call, collect debts, foreclose on your home, repossess your vehicles, or place liens on the property. There are exceptions, and creditors can ask to have the stay lifted. This does protect you from debt collection harassment.

The bankruptcy packet is turned over to a bankruptcy trustee. This person can request your most recent tax returns, bank statements, paycheck stubs, and any other information requested.

Assets become a temporary part of the "bankruptcy estate" and cannot be sold by you.

The trustee evaluates secured debts like mortgages and car loans. Depending on your situation, you may be required to pay creditors, reaffirm amounts owed, or have assets repossessed.

Finally, the trustee petitions to sell a nonexempt property and distribute proceeds to unsecured creditors.

Once you complete the bankruptcy process, you do not owe money to anyone. However, it may show up on credit reports for up to ten years and affects applications for mortgages, loans, and credit cards.

How to rebuild your credit after filing for Chapter 7 Bankruptcy

Once you file bankruptcy you can begin to rebuild your credit. The first and most important thing you can do is to pay every bill on time and in full.

If you would like more information on repairing credit scores after Chapter 7 bankruptcy, follow this link.

Q&A

Chapter 7 Bankruptcy Alternatives in Florida

Bankruptcy is not for everyone and should be a last resort for most people. Before you file, take time to investigate your options. Debt settlement is a very good alternative to filing for Chapter 7 bankruptcy.

In debt settlement, you or a debt settlement company negotiates with creditors who hold unsecured debts to lower the amount you owe. During the negotiations, you save up money to pay off the reduced amounts without the hassle, expense, and social stigma.

Pacific Debt Relief

Pacific Debt Relief is one of the leading settlement companies in the US and is proud to have settled more than $300 million in unsecured debts for people who may have been considering bankruptcy.

If you'd like to learn more about debt settlement, check out this link. Then give us a call for a free consultation. Our award-winning debt specialists will explain all your options so you can make an informed decision.

While we do not handle secured debt, our specialists will help you understand those options as well.