Filing for bankruptcy can be a complex and challenging process. However, it can also offer a fresh start and relief from overwhelming debts. If you reside in Port St. Lucie or Fort Pierce, and are considering bankruptcy as a viable option, this blog will serve as a helpful guide. Here, we outline the key steps and important considerations involved in filing for bankruptcy in St. Lucie County.
What is bankruptcy?
Bankruptcy refers to a legal process that allows individuals, businesses, or other entities to seek relief from their overwhelming debts and financial obligations. It is a formal declaration that acknowledges an inability to repay debts as they become due. When someone files for bankruptcy, it is typically done through a court system, where the debtor’s assets, liabilities, and financial affairs are evaluated and managed according to specific bankruptcy laws and regulations.
Purpose and goals of bankruptcy
The primary objective of bankruptcy is to provide debtors with a fresh start by either discharging their debts or establishing a structured repayment plan. The specific details and procedures of bankruptcy can vary depending on the jurisdiction and the type of bankruptcy being pursued.
Common misconceptions about bankruptcy
There are many misconceptions about filing for bankruptcy. It’s important to know that filing for bankruptcy does not mean you lose everything. It also does not ruin your credit score forever. Learn more about the common misonceptions of filing for bankruptcy here.
Different types of bankruptcy
There are several different types of bankruptcy available under the United States Bankruptcy Code. Below are the three most common types of bankruptcy for individuals and businesses in St. Lucie County.
Chapter 7 Bankruptcy
Also known as “liquidation bankruptcy,” Chapter 7 bankruptcy involves the liquidation of non-exempt assets to repay creditors. A court-appointed trustee oversees the sale of assets and distributes the proceeds among eligible creditors. Many unsecured debts can be discharged, providing the debtor with a fresh start.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is often referred to as “reorganization bankruptcy” or a “wage earner’s plan.” It allows individuals with a regular income to create a court-approved repayment plan to repay their debts over a period of three to five years. Debtors can keep their assets while making monthly payments to the bankruptcy trustee.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy primarily applies to businesses and individuals with substantial debts. It involves the reorganization of debts to develop a plan for repaying creditors over time while continuing business operations. Chapter 11 bankruptcy provides more flexibility and is commonly used by large corporations but can also be utilized by individuals with complex financial situations.
Eligibility and requirements for filing for bankruptcy in St. Lucie County
To file for bankruptcy in Port St. Lucie or Fort Pierce, you must meet certain eligibility requirements. Here are the key factors to consider:
- Residency – You must live in Florida for at least 91 days before filing for bankruptcy in the state.
- Means Test – The means test helps determine if you are eligible for Chapter 7 or Chapter 13 bankruptcy. The test compares your income to the median income in Florida for a household of your size. If your income falls below the median, you will likely qualify for Chapter 7. If your income is above the median, further calculations determine if you are eligible for Chapter 7 or determine the length and amount of your Chapter 13 repayment plan.
- Credit counseling – Prior to filing for bankruptcy, you are required to complete credit counseling from an approved agency within 180 days. The agency evaluates your financial situation, provides information on alternatives to bankruptcy, and assists in creating a personal budget plan.
- Bankruptcy forms and documentation – You must complete several bankruptcy forms to disclose your financial information, debts, assets, income, and expenses. Additionally, you must supply tax returns, pay stubs, bank statements, and records of assets and debts.
- Filing fees – There are fees associated with filing for bankruptcy in St. Lucie County. If you are unable to afford the fees, you may qualify for a fee waiver or installment payments.
- Mandatory credit counseling and debtor education courses: After filing for bankruptcy, you must complete a debtor education course from an approved agency. This course provides financial management education and aims to equip you with skills to manage your finances effectively after bankruptcy.
Understanding the bankruptcy process
Once you determine bankruptcy is the best option for you, there are certain steps to the bankruptcy process. Note, these are general steps. Each bankruptcy case is different.
- Undergo credit counseling. This must be done within 180 days of filing for bankruptcy.
- Determine which type of bankruptcy is right for you. You will likely apply for Chapter 7 or Chapter 13 bankruptcy.
- Retain a bankruptcy attorney. This step is optional, but highly recommended. A bankruptcy attorney can provide expert advice and ensure you get the best “deal.”
- Complete the bankruptcy forms. Gather all necessary financial information, including tax returns and records of assets and debt.
- File the bankruptcy petition. Submit completed bankruptcy forms to the bankruptcy court in your jurisdiction. If you have an attorney, he or she will handle this process for you. Once filed, an automatic stay goes into effect, halting creditor collection efforts against you.
- Attend the Meeting of Creditors (341 Meeting). Typically held within 30 to 45 days after filing, this meeting allows the bankruptcy trustee and creditors to question you about your financial affairs. Your attorney will accompany you to the meeting.
- Complete a financial management course. You must complete a debtor education course from an approved agency. The course provides financial management education and helps you develop skills to better manage your finances post-bankruptcy.
- Enter the resolution of assets and debts. In Chapter 7, the trustee may liquidate non-exempt assets to repay creditors. In Chapter 13, you’ll work with the trustee to develop a court-approved repayment plan.
- Discharge debt (Chapter 7) or complete repayment plan (Chapter 13). In Chapter 7, eligible debts are discharged, meaning you’re no longer legally obligated to repay them. In Chapter 13, upon successful completion of the repayment plan, any remaining eligible debts may be discharged.
Hiring a bankruptcy attorney
Hiring a bankruptcy attorney can provide numerous benefits and significantly enhance your experience and outcomes throughout the bankruptcy process.
- An experienced bankruptcy attorney possesses in-depth knowledge of the intricacies of bankruptcy law, including exemptions, eligibility requirements, legal procedures, and potential pitfalls. They can guide you through the process, ensuring compliance with all relevant laws and maximizing the benefits available to you.
- Every financial situation is unique, and a bankruptcy attorney can provide personalized advice tailored to your specific circumstances. They can also explore alternatives to bankruptcy, such as debt negotiation or consolidation, if applicable.
- Having a bankruptcy attorney by your side offers legal protection and representation throughout the process. They can communicate with creditors on your behalf, handle legal documentation, navigate court proceedings, and advocate for your rights and interests.
- A bankruptcy attorney knows the required forms, schedules, statements, and supporting documentation. They can efficiently prepare and file the necessary paperwork, minimizing the risk of errors or omissions that could potentially delay or jeopardize your case.
- Bankruptcy involves potential risks and long-term consequences. A bankruptcy attorney can help you understand and mitigate these risks, ensuring you make informed decisions. They can help protect your exempt assets, navigate potential challenges, and advise you on actions to avoid that may jeopardize the success of your bankruptcy case. Additionally, an attorney can help you maximize the benefits available to you, such as discharging eligible debts or creating a feasible repayment plan.
- Dealing with overwhelming debt and financial uncertainty can be stressful and emotionally challenging. Hiring a bankruptcy attorney provides peace of mind, knowing that you have a legal professional handling your case and advocating for your best interests.
Are you considering filing for bankruptcy in Port St. Lucie or Fort Pierce?
We can help. Call us at 866-930-6435.
Our experienced St. Lucie County bankruptcy attorneys have helped hundreds of Port St. Lucie and Fort Pierce residents and businesses get a fresh financial start. We can help you navigate the complexities of bankruptcy law, provide personalized advice, protect your rights, streamline the process, and maximize the benefits available to you. Our expertise and support will make a significant difference in your bankruptcy experience and ensure the best possible outcome for your financial future.
We offer free bankruptcy consultations to help you understand your legal and financial options. Call us today at 866-930-6435 to schedule your complimentary meeting.