Chapter 7 Bankruptcy Lawyer in Clearwater, Florida
In our challenging economic climate, many Florida residents have been unable to pay their bills, resulting in a looming threat of foreclosure of their home or repossession of their vehicle. In many cases, filing for bankruptcy helps individuals enjoy a fresh financial start while remaining in their homes.
Chapter 7 bankruptcies are known as liquidation bankruptcies. In Chapter 7, the debtor can apply to have his or her eligible debt “discharged” or removed. In exchange, the bankruptcy court will liquidate most of the debtor’s assets and use the cash gained from the liquidation sale to pay the debtor’s eligible petitioning creditors. When the liquidation process is complete, the bankruptcy court will discharge your remaining applicable debt, giving you a fresh financial start.
Chapter 7 Bankruptcy Means Test
Chapter 7 bankruptcy is intended for debtors who are unable to pay back their debts on their own. Thus, the federal law regulating chapter 7 bankruptcies limits a debtor’s financial assets and income level. Debtors must show that their income is not above these limits, or they will not qualify to file for a chapter 7 bankruptcy. The income and asset limitations placed on chapter 7
bankruptcy applicants are referred to as the “chapter 7 means test.” The means test included in chapter 7 bankruptcies is intended to stop those with the means to pay back their debt from filing for a Chapter 7 bankruptcy.
If your income falls below the state median income level, you will not need to submit paperwork related to the means test. If your debts are primarily not consumer debt, you will not need to meet the means test. For example, suppose most of your debts are associated with a prolonged stay in the hospital and other medical treatment. In that case, you may be exempted from the means test. Additionally, you will be exempt from the means test if you are a disabled veteran. The means test involved in a chapter 7 bankruptcy is complicated and difficult to understand. If you are unsure whether you meet the chapter 7 bankruptcy means test, attorney Carolyn Secor, P.A., is here to help. She will review your financial situation and advise you whether you qualify for a chapter 7 bankruptcy or you need to file for chapter 13 bankruptcy.
Dischargeable Debts in a Chapter 7 Bankruptcy
The main benefit of filing for chapter 7 bankruptcy occurs when the bankruptcy court discharges most of your debts. You will be able to discharge most of your unsecured debts once the chapter 7 bankruptcy process is finished. Unsecured debt is any loan or obligation that is not backed up by collateral. Suppose you did not agree that the creditor would be allowed to take your car, home, or other property if you do not pay your debts. In that case, the debt is unsecured.
However, if you have a car payment or mortgage, you agree that the creditor could attach a lien to your property and take your car or home if you fail to make the payments on time. This type of debt is a secured debt. You will be able to discharge some types of secured debt in a chapter 7 bankruptcy even though the lien attached to your property will not go away. You could discharge the debt on your car loan or mortgage, but you would need to give up the vehicle or home. Common examples of unsecured debt that the bankruptcy court will discharge in a chapter 7 bankruptcy include:
- Any type of consumer debt
- Medical bills
- Utility bills
- Back rent
- Personal loans
- Credit card bills
- Some types of government benefits overpayment
Debts That Cannot be Discharged in a Chapter 7 Bankruptcy
Some debts cannot be discharged in the Chapter 7 bankruptcy process. You will not be able to discharge your student loan debt during the bankruptcy process. Additionally, the bankruptcy court will not allow you to discharge debt from certain types of luxury purchase obtained right before you filed for bankruptcy. If you incurred a debt within 90 days of filing for bankruptcy for
a luxury good or service, these debts are not dischargeable. Additionally, lawsuit judgments are usually not dischargeable, but there are a few exceptions. Certain types of tax debts are not dischargeable.
Chapter 7 Bankruptcy Exemptions
Under Florida law, certain types of secured debts are exempted from liquidation as long as the debt is reaffirmed with the creditor, and an agreement to pay the debt off promptly can be reached. Florida has its own set of property eligible for exemption. The debtor must have lived in Florida for the last 730 days to take advantage of these exemptions. Florida offers a generous homestead exemption.
The debtor can exempt an unlimited amount of home equity from bankruptcy liquidation as long as the property is not larger than a half acre in a municipality or 160 acres outside the municipal zone. If you decline to use this homestead exemption, you will be able to use a “wild card” exemption that you can apply to up to $4,000 of your personal property.
The Benefit of Hiring a Chapter 7 Bankruptcy Lawyer
The process of filing for Chapter 7 bankruptcy in Florida is complicated. There are many factors that an individual should consider before filing for bankruptcy. Working with an experienced bankruptcy lawyer will allow you to move through the process smoothly, and we will provide you with the legal protection you need. Attorney Carolyn Secor, P.A., has a proven track record of successfully representing Clearwater area clients in chapter 7 bankruptcies.
Contact a Clearwater Chapter 7 Bankruptcy Lawyer Today
Are you considering filing for chapter 7 bankruptcy in Clearwater, Florida? Attorney Carolyn Secor, P.A., will review your financial situation and consider your assets, income, and debt to help you choose the most advantageous path forward. If you decide to file for chapter 7 bankruptcy, she will represent your best interest throughout the process. Contact Carolyn Secor, P.A., today to schedule your initial consultation.