Deciding to file for bankruptcy is never easy. People tend to put it off for longer than they should. There’s a huge amount of stigma attached to filing for bankruptcy, people who have worked all their lives feel as if they are “deadbeats.” What people fail to understand is that filing for bankruptcy is a right that is enshrined and protected in the Constitution of the United States of America under Article 1, Section 8, Clause 4. The founding fathers intended bankruptcy to protect people from being thrown into jail or having their property confiscated to pay their debts. Plenty of famous people have filed for bankruptcy, and plenty of big companies as well. Filing for bankruptcy as a Chapter 7 can help by giving you a fresh start, or in more complicated situations, reorganizing your debt as in a Chapter 13 bankruptcy.
Filing Chapter 7 bankruptcy in Florida depends on how much property and assets you have versus how much secured and unsecured debt you are holding. Looking at your overall financial picture, there are some questions that you should ask yourself before you consider filing for bankruptcy.
Are you currently involved in collection actions, have your wages been garnished, or are you being sued over nonpayment?
Are you receiving calls and notices from your debtors or collection agencies?
Are you using your credit cards for basic expenses such as groceries, gasoline, or paying your monthly utility bills?
Are you unsure of what you owe and to whom? It’s not unusual to lose track of your debt once a debt is given to a collection agency. The debt is actually an instrument that can be bought and sold, much like an item of property.
Are you using payday loans to make it from week to week? This can indicate a severe cycle of that where your current income is insufficient to cover your expenses between paychecks.
Are you making minimum payments on your debts, but never seem to get ahead of them?
If you have answered yes to one or more of these questions, then you need to speak to an experienced attorney can help you with either consolidating your debt, negotiating your debt, or with filing for personal bankruptcy.
Filing Chapter 7 bankruptcy in Florida has the potential to give you a fresh start once you are out from under your debts, and they have been discharged by the bankruptcy. Additionally, filing for bankruptcy with an automatic stay on any collection actions, lawsuits, or judgments already in process. Because this is a liquidation bankruptcy, there is no provision for catching up on payments such as mortgages or car notes. Filing for Chapter 7 bankruptcy in Florida generally takes about three to four months from filing to discharge. The principal drawback is that your nonexempt property is liquidated to pay your debtors as much as possible.
Nonexempt property includes the Florida homestead exemption which is famous but misunderstood. Homestead allowance is unlimited when the length of ownership requirements have been met you must have lived in Florida in the principal residence that you are claiming as the homestead for 40 months, otherwise the exemption is capped at amount dictated by federal law. And as another caveat, the property may not be larger than half an acre in a municipality or larger than 160 acres outside of a municipality. If using the homestead exemption, personal property is limited to $1000 – while it is $4000 if not using the homestead exemption. A personal vehicle is exempt up to $1000, but this amount increases if a married couple is jointly filing for bankruptcy. Wages are exempt from garnishment up to $750 a week for the six months prior to filing for bankruptcy. Finally, certain pension and retirement accounts such as 401(k)s, IRAs, and Roth IRAs may be exempt from consideration as assets by the court.
There are several different types of bankruptcy, each one meant to remedy a different situation. In this entry, the focus is on personal bankruptcy – specifically on filing Chapter 7 bankruptcy in Florida. Not a lot of people know that each state handles bankruptcy in the federal courts but differ in the details of exemptions and allowances. In order to determine if you will be able to file Chapter 7 bankruptcy in Florida, you must first pass a means test. Eligibility for filing Chapter 7 bankruptcy in Florida depends on your household size and your income versus the Florida median income for a family of your size.
The court will look at an average of monthly income for the six months previous to your filing, and if the median of your income is below the Florida median income, then you’re eligible to file a short form means test. However, even if you are bringing in above the median Florida income, there is still hope for filing a Chapter 7 bankruptcy. This long form means test further analyzes expenses and income by taking into account expenses that can lower your monthly income. Additionally, certain types of income such as disability and Social Security income are exempt from being considered since without those payments, it is possible to qualify for Chapter 7.
At Van Horn Law Group, we are not only experienced bankruptcy attorneys but have experience in all types of debt. Whether it’s student loans, credit cards, medical debt, or other financial stumbling blocks, we are here to help. Our Fort Lauderdale and West Palm Beach offices are open seven days a week and your initial consultation is free. Let us take a look at your overall debt picture and give our best legal advice before you make a decision. There are options to bankruptcy, and we can tell you whether or not you should file for Chapter 7 bankruptcy in Florida.
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