Do I Qualify for Chapter 7?

Do I Qualify for Chapter 7? Have You Ever Asked Yourself About It?

Do I Qualify for Chapter 7? Don’t just asks yourself, I tell you this! The burden of debt can follow you for years. The filing of bankruptcy will, among other things, prevent creditors from contacting you or taking any other collection action. Finding the right lawyer can help you navigate the process. A bankruptcy lawyer will guide you through all the necessary meetings, and take care of all the paperwork.

While bankruptcy may not solve all debt problems, it can offer relief in some cases and a new start. Talk to a Jacksonville bankruptcy lawyer today, without any cost or commitment, if you are unsure if this is right for your situation. For each chapter, there are different residency and income requirements. Read on to find out what you need to do in order for Chapter 7 bankruptcy to be filed in Florida.

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What is a Chapter 7 Bankruptcy?

Chapter 7 bankruptcy can also be referred to by the term “liquidation”. This legal procedure discharges an individual’s unsecured debts after a trustee has sold all non-exempt assets in their “bankruptcy” estate. Proceeds are then distributed to creditors based on the order of priority.

Chapter 7 bankruptcy is only applicable to unsecured debts. Unsecured debts are defined as debts that don’t have collateral backing them up. Credit card debt, medical debt and certain tax debt are all included.
In a Chapter 7 bankruptcy, secured debts, like a mortgage or vehicle loan, are not discharged. Child support debt and the majority of overdue taxes are also not dischargeable.
While the Chapter 7 filing process requires the liquidation assets, you can claim a variety of exemptions. You can either use the federal exemption system, or Florida’s specific state exemptions. These are among the most generous exemptions in the nation.

If you are concerned that bankruptcy may liquidate your personal belongings and have unpaid debt, it is important to know that, based on a national sample of Chapter 7 bankruptcies, only 7 % of them resulted in assets that could be distributed to creditors. There were also “no asset” cases, where the petitioner excluded all their possessions. Learn more about which debts can be forgiven in chapter 7 bankruptcy. Did It answer your question about “Do I Qualify for Chapter 7?”, or read more.

The “Means Test”

To be eligible to file Chapter 7, all applicants must pass a means-test. This step is only for those with higher incomes. You can continue filing if your income is below the median Florida household size.

Florida’s median monthly income is $3,493 for a household of one. This number can fluctuate depending on your household size and other factors. You must perform the means test if you earn more than this amount. This includes declaring all of your assets, debts, and income.

It is important to note that not all of your income or possessions are included. There are exemptions for certain incomes that cannot be used to pay off your debts. Veterans who have accumulated most of their debts while serving in the military or on homeland defense are also exempt from the means test.

Applicants earning more than Florida’s median income will need to provide documents proving their income and expenses that can be deducted. Their monthly income will then be calculated (over the past 60 months). If it is less than $7,475, they are likely eligible to file a Chapter 7 bankruptcy.

The means test Determines if you can pay back some of your debts without liquidating your assets. If your earnings are above the threshold for the means test, you might be required to file Chapter 13 bankruptcy rather than Chapter 7 bankruptcy.

You’ll most likely need to choose another bankruptcy option if your income monthly is higher than $12,475. Calculations will be required to determine eligibility for any monthly income between $7475 and $12,475.

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Filing a Bankruptcy Petition

In Florida, there are three districts: Southern, Middle and Northern Districts. Your residency will determine which district you should file in. A bankruptcy filing is an assortment of documents that provide all the required financial information for the Bankruptcy Court.

You will be asked to provide information about your income, expenses and assets (real estate and personal property) as well as any liabilities or debts that you would like to have forgiven. The petition is signed under oath.

After your petition has been filed, your case is automatically put on hold. This automatic stay protects you from creditors while your case goes through the post-filing procedure. The bankruptcy petition involves a meeting between you and a court appointed trustee. They will assess your information, ask questions about your finances and evaluate the information provided. Your attorney is entitled to be present during this meeting. The purpose of the meeting might sound scary, but it’s not. The meeting takes place in a conference or boardroom and not in a courtroom. The trustee cannot threaten the debtor nor interrogate him, but can only ask financial questions.

Exempt and Nonexempt Assets

Chapter 7 is the liquidation chapter and it’s important to know the difference between non-exempt and exempt assets before filing.

You will not be able to sell any exempt assets in order to repay creditors. However, you may surrender non-exempt property to pay a portion of your unsecured debt. The debtor has insufficient liquid assets and therefore, over 90% of bankruptcies filed are “no asset” cases. You can still discharge your debt even if you have no assets. Just make sure you file the required paperwork.

Examples of assets that are not exempt include:

Valued collections
The family heirlooms
Cash, Bank Accounts, Bonds & Investments
Second car or home

Examples of exempt assets include:

Homestead exemption can limit the amount of primary residence.
Clothing, furniture and household appliances at reasonable prices
Pensions
Public Benefits
Tools required for the petitioner’s trade
Damages awarded in personal injury

Talk To A Florida Bankruptcy Lawyer Today

When you decide to file for bankruptcy, there are many things to consider. You may lose your ability to get a personal loan and have your credit rating affected, but you’ll still be able to reap some benefits. You can erase your unsecured debt, create a budget that is clear and free of collection notices without having to worry about them.

It doesn’t need to be a difficult process. Having your own lawyer can make a huge difference. The U.S. The Bankruptcy Court’s website recommends petitioners to work with an attorney for assistance with the filing process. Public employees and other court personnel involved in your case are not permitted to provide advice or answer specific questions such as how to fill out your forms.

Bruner Wright, P.A. have experienced attorneys who can help you. For over 30 years we have helped people just like you get the best possible outcome from their bankruptcy case. Your initial consultation is free and comes without any obligation when you work with our firm.

Still asking yourself about Do I Qualify for Chapter 7?

Call 904-432-1200 today to schedule a free case review and start your journey to a future with less stress and fewer worries.