Has your income decreased and your debts gotten out of control? Have you stop answering your phone or opening your mail? If the answer is yes then it might be time to consider filing for bankruptcy. The depending on the chapter that you file under almost all debts can be discharged without any loss of assets.
Bankruptcy Law FAQs
Q. What types of Bankruptcy are there?
A. Bankruptcies are listed under different chapters, mostly commonly used are either Chapter 7 which is liquidating or Chapter 13 which reorganizes. In a Chapter 7, all debts are discharged and you surrender all of your non-exempt assets. In a Chapter 13, a plan is filed to show how creditors will be repaid over a period of time.
Q. What qualifies as ‘exempt property’?
A. The federal system has a set of exemptions. Some states like Florida require you to use its own exemptions. Florida is pretty generous is its exemptions such as:
- Homestead- depending on the length of time your resided in your home you can exempt all of the value or a portion of it;
- Motor Vehicle – up to $1000.00 exemption; more if your married filing jointly;
- Wild card Exemption – If you don’t use the homestead exemption your can exempt up to $4000.00 of personal property.
- Insurance/Disability/Retirement plans- certain types of retirement plans and the cash values of life insurance policies are exempt from the claims of creditors; Disability payments are also exempt.
Q. If I could wipe away my debt with a Chapter 7 why would anyone file a Chapter 13?
A. Some people have nonexempt property or assets that they do not wish to part with which would ultimately be lost in a Chapter 7 filing. There are also some types of debts that are not dischargeable at all (ie: student loan debts, criminal fines). Also if you have filed for Chapter 7 bankruptcy within 6 years you are not eligible to file it again.
Q. What types of debts are not dischargeable?
A. When you file a Chapter 13 bankruptcy the following are types of debts that must be paid in full:
- Certain taxes (ie: IRS)
- Alimony or child support
- Debts to State or Federal government for fines and penalties
- Most student loans
- Debts owed due to Civil Theft
- debts owed to certain tax-advantaged retirement plans
- Homeowner association fees
- Attorney’s fees
- Purchases or loans made within 60 days of filing.
- Criminal court fines and restitution
- Any unscheduled debts (debts not listed on the bankruptcy petition)
Q. How do I file for bankruptcy?
A. A petition is filed electronically with the bankruptcy court. Schedules listing your assets and liabilities are submitted to the court and reviewed by a bankruptcy trustee to determine if there are any assets available for distribution to the creditors.
Q. Do I have to pay a fee?
A. Each type of bankruptcy has an associated fee to file the petition. In some cases a waiver can be requested of the filing file.
Q. What is a Means Test?
A. The Means Test is used in Chapter 7 bankruptcy to determine your income compared to the median income of households your size in Florida. If your income shows that you can pay back some of the debt, you will not qualify to file under Chapter 7, but you could qualify to file under a different chapter such as Chapter 13.
Q. How long till my case is discharged?
A. Once your case is filed, a trustee is assigned to your case and will arrange a meeting of the creditors. In Florida, that meeting could take place as soon as 30 days but not longer than 60 days. On rare instances creditors may attend the meeting but usually it will be just the trustee, yourself and the attorney. Once the meeting is concluded you should receive a notice that your debt has been discharged within 6 months.
Q. When can I expect the phone calls to stop?
A. Once you file bankruptcy, all creditor calls must stop. Any further collection of ta debt must be through the bankruptcy court. All of your creditors will be notified of the filing. If you continue to receive calls from a creditor after the filing, let our office know immediately. Creditors are subject to the Fair Debt Collection Practices Act and can be sued if they persistently contact you after the filing.