Which Type of Bankruptcy Is Right for You?
In the U.S. There are three types available under the U.S. Bankruptcy Code. These are referred to as chapters and include Chapter 7 and Chapter 13 for personal bankruptcy and Chapter 11 for businesses. Small businesses around Jacksonville can use these depending on their needs. Here are the steps on how to declare bankruptcy in Jacksonville Florida.
There are two types of bankruptcy: Chapter 7 and Chapter 13. In exchange for your property, Chapter 7 can help you wipe out your most significant debts in just a few months. Your “exempt” property is protected property.
Chapter 13 can take three to five years. You can repay some or all of your debts during that period under a payment plan approved by the bankruptcy court. People who are behind on their mortgage payments can use this option to get caught up with Chapter 13. If you qualify, most people who file for bankruptcy prefer Chapter 7. This allows you to get rid of lots of debt in just a few months.
You must prove that you are unable to repay creditors reasonable amounts of income in order to qualify for Chapter 7 bankruptcy. This can be done by:
- Proving that your income is less than the Florida median income of your household size.
- Proving that you cannot pay. Compare your income and expenses using a complicated formula called the bankruptcy means test.
You may still be eligible to file Chapter 13 if your income exceeds the median income in your state or family size. If the means test shows that you have sufficient disposable income to make reasonable payments to your creditors, then you might qualify. You must have less than the maximum amount of debt and must have filed your taxes for the past four years.
You must attend a mandatory credit counseling session with a government-approved credit counseling agency. This should be done at least six months prior to filing for bankruptcy. You will receive a certificate after you have completed the class. You must file this certificate with your bankruptcy petition.
You will need to fill out dozens of pages detailing your assets, debts, income, and plans for loans secured by collateral such as a vehicle loan or mortgage.
You will need to ensure you have all the information you need in order to prepare, such as your:
- Creditors, including details about the type of debt you have and how much it is
- Income including sources, amount, and frequency
- Property including its current value, whether it’s exempt according to the bankruptcy code
- Living expenses include type, amount, and frequency
Married people: This information is also required for your spouse, even if you are filing alone.
You can create your own bankruptcy forms if you are organized and diligent. However, this is where you will most likely appreciate professional help, or at the very least a step-by-step guide for Chapter 7 or Chapter 13.
Once you have your petition and supporting documentation in order, it is time to file it with the appropriate Florida district court. You must pay the filing fees by cash or money order when you file your petition. Unless you request a waiver of fees or installments.
After filing for bankruptcy, you will need to attend a 341 hearing or a creditors’ meeting. The meeting will be led by the bankruptcy trustee who is assigned to your case. He or she may also ask questions about information on your bankruptcy forms. You may be contacted by creditors to ask questions at the hearing.
While you may not need to worry about it, there is a possibility that you will need to file additional paperwork once your bankruptcy petition has been filed. You may file a request, also known as a motion, to have creditors (liens) removed from your property. You may also file objections with the court if you believe you owe more to creditors than you actually do.
You must take a debt management class within 45 days of your creditor’s meeting. This course is not the same as the credit counseling class that you took before you filed. The cost of the class can vary depending on your financial ability.
Once you have completed the steps and met all requirements for your bankruptcy filing, it’s now time for the court to discharge your dischargeable debts.
If your Chapter 7 case was dismissed and you have filed Chapter 7, you might be allowed to convert to Chapter 13.
There are always things that can happen after a bankruptcy case ends. These include finding a new exempt property or dealing with creditors trying to collect a discharged debt. A quick tip: Never agree to pay any discharged debt.
Call Your Local Jacksonville Bankruptcy Attorney!
Are you still not sure how to declare bankruptcy in Jacksonville? Bruner Wright’s professional bankruptcy lawyers are here to protect the rights of individuals and businesses in bankruptcy. If you’re looking for the best Jacksonville bankruptcy lawyer, don’t hesitate to give us a call!
Contact Bruner Wright P.A. today to schedule a consultation to speak to a bankruptcy attorney about bankruptcy and foreclosure. A member of our team will review your case to help you make the right choice. Our areas of expertise are personal chapter 7 bankruptcy, chapter 13 bankruptcy foreclosure, and business bankruptcy chapter 11. We want you to achieve financial stability!