Bankruptcy Chapter 7

At Shmucher Law, PL we have assisted hundreds of individuals file for Chapter 7 bankruptcy protection in Broward, Miami-Dade, and Palm Beach Counties. Chapter 7 can also be called a liquidation bankruptcy and it is probably the most common bankruptcy, and the bankruptcy most people want to be in because of the speed it can eliminate debts. Chapter 7 bankruptcy is used by individuals who have little assets and lots of debts (mortgage, cars, credit cards, medical bills, payday loans, family loans, etc.) The purpose of a Chapter 7 bankruptcy is to give people a fresh start, i.e. get rid of their debt and have them start over. In a Chapter 7 a debtor can typically discharge their credit card debt, medical debt, personal loans, repossession debt, as well as deficiency debts on mortgages. In some situations a Chapter 7 bankruptcy can assist an individual with wiping out a 2nd mortgage or equity line as well as old tax debts.

My Credit Will Be Ruined
One of the biggest reasons people are scared to file for bankruptcy is because they think their credit will be ruined. This is one of the biggest myths regarding bankruptcy. If you are already behind on your credit cards, home mortgage and vehicle note then your credit is already poor, and the filing of a bankruptcy will actually help REBUILD your credit. Typically our clients obtain a credit card three to six months after a completion of a Chapter 7 bankruptcy and they are eligible to buy a house between two and three years out.

Stop Creditor Harassment
Do you have creditors calling you at home, at work, and even calling your family members? Did you know that the filing of a bankruptcy can instantly stop creditors from ever calling you again? Yes, if you file for bankruptcy your phone will stop ringing, creditors won’t be able to threaten you with lawsuits and wage garnishments. Stop Lawsuits and Garnishments Have you recently been served with a lawsuit or has a creditor obtained a judgment against you and is now garnishing your wages? Chapter 7 bankruptcy can make these lawsuits and garnishments go away.

Chapter 7 Bankruptcy Option
If you create a budget for yourself and you determine that there is no way you will ever be able to pay off your debts, then you strongly need to consider filing for bankruptcy. If you don’t have any expensive assets or don’t make a lot of money then you should consider filing for Chapter 7 bankruptcy. Chapter 7 may be the best choice for you and in a few short months you could be debt free and on a path to rebuild your life and credit.

Chapter 7 FAQ
The following are sample questions that clients routinely ask me regarding a Chapter 7 Bankruptcy filing in South Florida:

Who can file Chapter 7?
An individual consumer can file for Chapter 7 bankruptcy and obtain a discharge. A husband and wife can file bankruptcy jointly or only one spouse can file. A debtor cannot file jointly with a separated or divorced spouse. A corporation may file for Chapter 7 bankruptcy but a discharge will not be granted, only an orderly liquidation of assets will occur.

What are the requirements to file Chapter 7 bankruptcy?
The main requirement to file is qualification. Not every debtor will qualify for a Chapter 7 bankruptcy. A meeting with a knowledgeable bankruptcy attorney is required and the means test must be examined in order to determine qualification. Furthermore the debtor could not have been granted a Chapter 7 or Chapter 11 discharge within the preceding eight years.

Do I qualify for the Florida exemptions?
In order to quality to receive the Florida exemptions the debtor must be a resident of the state of Florida. In order to be considered a resident the debtor must have lived in Florida for the past two years or 730 days. If a debtor doesn’t meet those requirements then the debtor may be able to use the Federal Exemptions or the State Exemptions of the state the debtor previously resided in.

Does the debtor need to be insolvent to file?
There is no requirement that the debtor need to be insolvent to file for bankruptcy. However 11 U.S.C. § 707(b) allows the court to dismiss a consumer bankruptcy case if finds that granting the relief would be an abuse of the bankruptcy provisions.

What is the monthly income analysis?
The debtor’s income will be analyzed to determine if the debtor can pay back creditors in a Chapter 13 plan rather than a straight liquidation Chapter 7 plan. The analysis averages the debtor’s previous six months of income. If the debtor’s average income suggests that the debtor has disposable income, to pay back creditors, then the debtor will become ineligible to file a Chapter 7 petition. The debtor’s current monthly income is then added to the debtor’s spouses income (if applicable) and multiplied by 12 to obtain an annualized family income. The annual family income is then compared to the median Florida income of a family of the same size. This determination can be processed by your bankruptcy attorney.

What are the median family incomes for Florida, Updated May 2014?
1 Person – $41,939 annually or $3,495 monthly
2 Person – $52,598 annually or $4,383 monthly
3 Person – $54,742 annually or $4,562 monthly
4 Person – $64,122 annually or $5,344 monthly
5 Person – $72,222 annually or $6,019 monthly
6 Person – $80,322 annually or $6,694 monthly
Additional persons are $8,100 annually.

What if I am below or equal to the median family income for Florida?
The debtor will likely be able to file for Chapter 7 bankruptcy, however it doesn’t guarantee that the debtor be eligible to file for Chapter 7. The debtor’s attorney must do further analysis of their monthly income and expenses.

What if I am above the median family income for Florida?
The fact that the debtor is above the median income does not preclude the debtor from filing a Chapter 7 bankruptcy. Instead the debtor must pass another test requirement called the means test to determine eligibility.

What are some of the allowable exemptions in Florida?
Homestead: any natural person may claim the homestead exemption as long as the property is: Under 160 acres if located outside a municipality Under ½ an acre if located within a municipality Personal property: Florida’s Constitution authorizes a person to exempt property to a value of $1,000 (joint husband wife can each claim $1,0000) Other exemptions: Life insurance proceeds Disability income benefits IRA, 401k Pension plans Prepaid college plans Any property that is owned as tenancies by the entireties

What debts are generally discharged?

All debts that don’t qualify as non-dischargeable including medical bills, credit card debts, or other unsecured debts. What debts are non-dischargeable? Certain taxes
Student loans
Domestic support obligations
Certain behavior based debts

What happens after filing?
Upon the filing of the Chapter 7 bankruptcy petition the automatic stay is enforced which prevents any creditors from contacting the debtor and puts any lawsuits or wage garnishments on hold. Approximately 30 days after filing a Chapter 7 bankruptcy petition a 341 meeting is held. Approximately 90 days after filing the debtor receives his discharge in the mail.

What is the automatic stay?
The automatic stay is a shield that protects the debtor while they are in bankruptcy. The automatic stay prohibits the following actions from occurring: collection proceedings on prepetition claims against the debtor
enforcement of judgments against the debtor or property of the debtor
any action to obtain possession of or control of the property of the estate

What is a 341 meeting?
When a debtor files for bankruptcy they must appear in court one time (chapter 13 bankruptcy may require the debtor to appear more), at a meeting called the 341 meeting of the creditors. The 341 meeting is conducted by a bankruptcy trustee and it gives the trustee and any creditors the opportunity to question the debtor regarding his bankruptcy schedules, assets or liabilities.

What is the time frame for a Chapter 7 bankruptcy?
The general time frame of a Chapter 7 bankruptcy filing in Florida takes between 90-110 days and at the conclusion of the time period the debtor will receive a discharge and their debts will be wiped out.

How can I contact Shmucher Law, PL to schedule a consultation?
Call our office at 954-309-5559 to schedule an initial consultation. During the initial consultation we will review all your options to get you out of debt including creditor negotiation, Chapter 7 bankruptcy or Chapter 13 bankruptcy filing.

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