Florida Bankruptcy Information
Understand Chapter 13 bankruptcy and Chapter 7 bankruptcy, and learn why filing with an attorney in Florida is a smart decision.
Filing Chapter 7 Bankruptcy in Florida
Chapter 7 Bankruptcy in Florida is the most common and simplest type of bankruptcy. Chapter 7 Bankruptcy is a considered a \"liquidation\" of a debtor\'s assets to pay their personal debt. In many cases Individuals, corporations, partnerships and married couples can all file Chapter 7 bankruptcy.
Chapter 7 Bankruptcy in Florida allows the Florida bankruptcy court to appoint a trustee to sell or liquidate the debtor\'s non-exempt assets to repay their creditors. Creditors are paid by the trustee in priority order, according to federal bankruptcy laws.
Changes in federal bankruptcy laws have made it increasingly difficult for debtors to file Chapter 7 Bankruptcy in Florida. Under the current bankruptcy laws, most individuals will now have to repay all or a portion of their personal debt by filing Chapter 13 Bankruptcy in Florida.
- How do you know if you qualify to file Chapter 7 Bankruptcy? There are several tests which are done to determine your eligibility. The first test is an income test which will evaluate your income for the last six months and determine if it is below the Florida median income (compared to other families of similar size). If you median income is above the median income, additional "means testing" must be done.
Median income for the state of Florida is provided by the United States Trustees. In the state of Florida, beginning March 15, 2011, the median income level for a single wage earner in the state of Florida was $40,029. For a two person family it was $50,130 and for a family of three it was $54,594. For a family of four it was $65,135.
Floridians whose income is not less than the median income for their state must pass additional means testing to find out if they can file Chapter 7 in Florida. The first step in the means test is to determine the debtor\'s disposable income or the income they have left over after paying their \"allowable\" monthly expenses. In general, the \"means testing\" will analyze the debtor\'s monthly income over the last six months and subtract priority debt (taxes owed, mortgage payments, school tuition- up to a threshold limit). If, after the expenses are subtracted, the debtor can pay $100 per month to their unsecured creditors or $6,000 within the next 5 years, they may have to file Chapter 13 Bankruptcy in Florida.
Filing Chapter 13 Bankruptcy in Florida
If you cannot file Chapter 7 Bankruptcy in Florida you may be able to file Chapter 13 Bankruptcy. Chapter 13 Bankruptcy in Florida does not immediately discharge debt but requires debtors to repay a portion or all of their debt back to their creditors under an approved three to five year bankruptcy repayment schedule. Debtors who complete their repayment plan may have their qualifying debts discharged, but it could take up to five years.
Chapter 13 in Florida may be the best option for many families. It will generally allow debtors to retain their property and it can stop repossessions, wage garnishments, bank account levies, and harassing creditor calls.
Who can file Chapter 13 Bankruptcy in Florida? Individuals, including the self-employed or those operating an unincorporated business, may file Chapter 13 Bankruptcy in Florida. To file a Florida Chapter 13 Bankruptcy the individual must have unsecured debt which is less than $360,475 and secured debt which is less than $1,081,400 (11 U.S.C. § 109(e)).
Not all property is included in the bankruptcy estate. Allowable property exemptions are outlined at the federal level, but many states have decided to \"opt out\" of these choices and have developed their own state lists. Certain states allow the filer to choose between the state list and the federal exemption list. In the state of Florida, you must use the Florida State Exemption List and Federal Exemptions are not allowed.
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