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What You Need to Know before Filing Chapter 7 in Florida
Chapter 7 bankruptcy is one of the two types of bankruptcy options available to individuals who live in the state of Florida. While Chapter 13 bankruptcy is intended for those who think they can pay back their overall debt slowly if they were allowed to make a fair payment agreement, Chapter 7 is intended for those who do not think they will be able to pay their current debt at all given their financial situation.
Electing to undergo the Chapter 7 bankruptcy filing process is a huge decision—one that should not be taken lightly. Those who file Chapter 7 in Florida should fully understand all of their legal and financial obligations. They will also have to make major choices, such as which exemptions to file to protect certain physical assets.
A Florida bankruptcy attorney can provide legal assistance and guidance to help you take actions that are in your best interest. Your lawyer will also ensure that your filing is done properly with all the needed documentation. In the event that there is an issue with your filing, such as a discrepancy in your income reporting, then your bankruptcy lawyer in Florida can help correct it.
Attorneys at Hoskins, Turco, Lloyd & Lloyd have been assisting residents along the Treasure Coast with filing bankruptcy for over 30 years. We understand that you are likely overwhelmed and scared about the bankruptcy process, which is why we want to help.
You can speak with an experienced Florida Chapter 7 Florida bankruptcy lawyer about your specific situation and your next best steps to take during a free initial case review. Schedule your free, no obligation consultation now when you call 866-460-1990 or contact us online
Florida Chapter 7 Basics
Filing Chapter 7 bankruptcy allows those in serious debt in Florida to have their eligible debt “discharged” in exchange for giving up ownership of nearly all of their physical assets, barring a few exemptions.
“Discharged” debt is not erased nor forgiven, but instead the debtor is freed of all legal obligations to pay back the debt. Creditors of discharged debts also have no legal means of pursuing you for repayment in most situations. Not all debts can be discharged, however.
When you file Chapter 7 in Florida, you volunteer to give up most of your assets to form an estate or legal trust. An appointed trustee will then liquidate all of this property to raise funds. These funds are then distributed proportionately to all eligible petitioning creditors.
Once this process is complete, your applicable debt will be considered “discharged” by the bankruptcy court.
Debt that Cannot Be Discharged in Florida
Certain debts are ineligible for discharge under the Chapter 7 bankruptcy process, including:
- Federal or Federally backed student loans, except in cases of “undue hardship”
- Alimony and child support payments
- Debts incurred through fraud
- Loans or credit card purchases of $1,150 or more incurred within 60 days of filing
- Most tax debt
- Criminal fines and penalties
- Debt that has been listed on a previous bankruptcy filing
- Debts owed after causing personal injury or death while DWI
Chapter 7 Means Test
Because Chapter 7 bankruptcy is intended to be used by those who cannot afford to pay back their debt, the U.S. bankruptcy code has established certain income limits and financial asset limits. These limits are meant to prevent those with the means to pay back their debt from filing Chapter 7.
You do not have to submit the paperwork for the means test if your income falls below the state’s median income level. You also exempt the means test if your debts are primarily not consumer debt related (ie mostly medical debt) or if you are a disabled veteran.
Otherwise, you are required to take the U.S. means test to calculate your average monthly income and expenditures.
Filing for Florida Chapter 7 Property Exemptions
Certain types of secured debt can be exempted from liquidation if the debt is first “reaffirmed” with the creditor and an agreement to preserve the debt in return for timely repayment can be made. In order to reaffirm a debt, the debtor must be current on all payments for the debt.
Florida maintains its own set of property eligible for exemption. To use Florida’s Chapter 7 bankruptcy exemptions, you must have domiciled (officially lived) in Florida for the past 730 days, or roughly two years. If you have not lived in Florida for the past two years, then you must use the exemption laws of the state where you were domiciled for the majority of the previous 180 days before the 730-day period.
Florida offers generous homestead exemptions, especially to property owners who do not live in a municipality. Under Florida law (Florida Statutes §222.01-02), you can exempt an unlimited amount of home equity as long as your property isn’t larger than a half acre in a municipality or 160 acres outside municipal zones.
You can also exempt the following, in most circumstances:
- Savings accounts for education, health emergencies, and hurricane disasters
- Prescribed health aids, such as hearing aids or assistive devices
- Tax credits and refunds (although these may go to back tax debt)
- Certain property owned in a partnership (See Florida Statutes §620.153§620.8307)
- Personal property up to $1,000 in value
- Funeral costs per Florida’s Preneed Funeral Contract Consumer Protection Trust Fund (§497.456)
- Up to $1,000 in motor vehicle equity
- Up to $750 in wages per week, or 75% of 30 times the federal minimum wage, whichever is greater
- Money that comes from child support or alimony
If you decline to use the homestead exemption, you have a “wild card” exemption that applies to up to $4,000 in personal property.
Certain pensions, public benefits, insurance policy benefits, and annuities may also be exempt.
To understand more about your options for exempting certain assets and secured debts, speak with a Florida bankruptcy attorney.
Where to File Bankruptcy in Port St. Lucie, Fort Pierce, Vero Beach, or Okeechobee
Residents along the Treasure Coast will file their bankruptcy with the U.S. Bankruptcy Court Southern District of Florida. Most filings for Port St. Lucie, Fort Pierce, Vero Beach, or Okeechobee will go to the West Palm Beach courthouse found at the address below:
Flagler Waterview Building
1515 North Flagler Drive, Suite 801
West Palm Beach, FL 33401
Answer Your Questions and Learn Your Best Options for Filing Chapter 7 in Florida with a Treasure Coast Bankruptcy Attorney
Because the Chapter 7 bankruptcy process is so complicated and because there are so many factors that have to be considered, the majority of bankruptcy filings are completed with the assistance of an attorney.
Hoskins, Turco, Lloyd & Lloyd offers personalized service, advice, and legal representation for all steps of filing Chapter 7 in Florida. We consider the totality of your assets, income, and other circumstances to help you choose the most advantageous options for your specific situation.
You can get started and learn more about what your next steps could be during a free initial case review. To schedule you free, no obligation consultation with a Chapter 7 lawyer in Florida, call 866-460-1990 or contact us online.
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