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Bankruptcy Chapter 7 In Florida: The Complete Guide

Are you considering bankruptcy in Florida?  If so, you’re likely wondering what the process entails. The team of Chapter 7 Bankruptcy attorneys at the Stiberman Law Firm has built this guide to explain everything you need to know about filing for Chapter 7 bankruptcy in Florida, from the initial paperwork to the court hearing.

Table of Contents

    What Is Chapter 7 Bankruptcy?

    Are you feeling overwhelmed with debt? Are you struggling to make your monthly payments? If so, you may be considering filing for Chapter 7 bankruptcy. In this article, we’ll discuss what Chapter 7 bankruptcy is and what it entails.

    Chapter 7 bankruptcy is a legal procedure that allows debtors to discharge their unsecured debts. This means that the debtor will no longer be responsible for those debts after the bankruptcy process is complete. In order to file for Chapter 7 bankruptcy in Florida, you must have lived in the state or own property in Florida for at least 180 days before filing. See 28 U.S.C. sec 1408.

    Chapter 7 bankruptcy is also known as straight bankruptcy or liquidation bankruptcy. It is the simplest and quickest form of bankruptcy. In most cases, the entire process can be completed in as little as four to six months.

    While there are pros and cons to filing for bankruptcy, it can be a helpful tool for those who are struggling to make ends meet. If you’re considering filing for Chapter 7 bankruptcy, here’s what you need to know.

    Pro Tip: On several occasions, I have observed individuals file their Bankruptcy Chapter 7 case PRO SE or without legal counsel. As a result, their bankruptcy case was dismissed because they failed to follow the regulations for filing for bankruptcy. I’ve heard bankruptcy judges stress the need of hiring a bankruptcy attorney while instructing debtors on how to proceed with their cases. Individuals in Florida seeking legal advice about going bankrupt can only get it from attorneys.

    Chapter 7 vs Chapter 13 Bankruptcy In Florida

    Chapter 7 and Chapter 13 are both types of bankruptcy that can help people in Florida get out of debt, but they have different benefits and drawbacks.

    Chapter 7 is a form of liquidation, meaning that nonexempt assets are sold off in order to pay creditors. This can be a quick way to get out of debt, but it also means that people can lose their personal property.

    Chapter 13 is a form of reorganization of your debt that allows you to get caught up on your debts and avoid losing your home, car, or other property. However, it requires you to take part in a three-to-five-year payment plan.

    There are many things to consider when determining whether Chapter 7 or Chapter 13 bankruptcy is right for you. We recommend you speak with an experienced bankruptcy attorney to get a better idea of what kind of bankruptcy is right for you.

    How Chapter 7 Bankruptcy Works

    If you are considering bankruptcy, it is important to understand the process. Chapter 7 bankruptcy can be a daunting task, but by following the steps listed below, you can make the process as smooth as possible.

    First and foremost, you need to decide if Chapter 7 bankruptcy is the right option for you. Once you have made that decision, gather all of your financial information and meet with an attorney who specializes in this type of bankruptcy.

    This will give you a better understanding of how the process works and what to expect.

    Filing A Petition With The Bankruptcy Court

    If you are thinking of filing for Chapter 7 bankruptcy, it is important to understand the process and what to expect. The act of filing for Chapter 7 bankruptcy means that you have filed the initial bankruptcy forms together with the court filing fee with the bankruptcy court. 

    You can download all of Chapter 7 official forms by clicking the official Chapter 7 bankruptcy forms pdf.

    The petition is a formal document that asks the court to declare you bankrupt and it is accompanied by a list of schedules and forms where you will list your information about your assets, liabilities, and income. You will also need to disclose any recent financial transactions, such as selling property, transfers of property, gifts, loan repayments, taking out loans, and closed businesses. 

    Under federal law, once your petition is filed, an automatic stay is put in place which will prevent creditors from trying to collect debts from you.

    Attend A Credit Counseling Course

    In order to file for Chapter 7 bankruptcy, you must first attend a credit counseling course. This course will help you understand the bankruptcy process and what to expect. It will also help you develop a plan to manage your finances going forward.

    The credit counseling course is required by the Bankruptcy Court in order to ensure that you are making an informed decision about filing for bankruptcy. It is important to understand that bankruptcy is not a cure-all for your financial problems. You will still need to make some changes to your spending habits in order to succeed financially after bankruptcy.

    The credit counseling course must be completed within six months of filing for bankruptcy (prior to). You can take the course online, over the phone, or in person. The course typically lasts about two hours and costs between $10 and $50. Be sure to ask the provider if there are any discounts available.

    After you complete the credit counseling course, you will receive a certificate of completion. You will need to file this certificate with your bankruptcy petition.

    A Bankruptcy Trustee Will Be Appointed To Your Case

    A bankruptcy trustee will be appointed to your case in order to manage your assets and debts. The trustee will be responsible for overseeing your financial affairs and making sure that your creditors are paid.

    The trustee may also sell off some of your property in order to repay your debts. You should cooperate with the trustee and provide any information that they request. Failure to cooperate with the Trustee can result in court sanctions including denial of your discharge.

    Attending The 341 Meeting of Creditors

    The 341 Meeting of Creditors is a mandatory meeting for people once they have filed for bankruptcy. The trustee will ask you questions about your financial situation and your bankruptcy petition during this meeting.

    You will also have a chance to ask any questions that you may have about the bankruptcy process. All creditors are invited to attend this meeting, but most do not. If a creditor does attend, they will be able to ask you questions about your finances as well.

    It is important to remember that although this meeting is not a trial and that you will not be put on the stand, you must provide your answers under oath. Your bankruptcy attorney can advise you on what to expect and the types of questions you will generally be asked. This meeting is an opportunity for the trustee, creditors, and yourself to ask and answer questions.

    After you have completed the steps above, your case will be reviewed by the trustee to determine if there are any assets to distribute to repay your creditors and if any additional information is needed.

    If the Trustee determines that there are no nonexempt assets to distribute, the Trustee will file a Report of No Distribution within a few days after the meeting of creditors.

    A Trustee’s Report of Not Distribution is filed with the bankruptcy court and will contain language such as:

    “Meeting of Creditors Held and Concluded. Chapter 7 Trustee’s Report of No Distribution: I, (Trustee’s First and last name), having been appointed trustee of the estate of the above-named debtor(s), report that I have neither received any property nor paid any money on account of this estate; that I have made diligent inquiry into the financial affairs of the debtor(s) and the location of the property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law. Pursuant to Fed R Bank P 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. I request that I be discharged from any further duties as a trustee.”

    Discharging Qualifying Debts

    Unless excused by the court, you must complete an instructional course concerning financial management from an approved provider and file a certificate of completion to be eligible to receive a discharge. This course is separate from the credit counseling course required to file your case. This is one of the easiest parts of the process and many people forget resulting in the case being closed without a discharge.

    Most debtors usually receive their discharge about 4 months after the case is filed.  The order of discharge is the legal document that says you no longer have to repay your qualifying debts. You can see what an Order of Discharge looks like by downloading Bankruptcy Official Form 318.

    If you don’t receive it, you can contact the court to ask for a copy.

    A Creditor, Trustee, or US Trustee can file an objection to discharge. The court can deny a discharge for reasons including:

    • Failure to complete the financial management course
    • Concealment of property with intent to hinder, delay, or defraud creditors
    • Destruction or concealment of books and records
    • Perjury and other fraudulent acts.

    You will have an opportunity to argue your position, and if the court agrees with you, it will issue an order of discharge. If the court disagrees with you, your debts will not be discharged and you will be responsible for repaying them. 

    Starting Fresh With A Clean Slate

    Once your qualifying debts have been discharged, you will be given a clean slate and you can start fresh. This means that you will no longer have to worry about creditors trying to collect debts from you.

    You can also begin to rebuild your credit by making on-time payments and using credit responsibly.

    Income Limits To File Bankruptcy Chapter 7 In Florida

    Qualifying for Chapter 7 Bankruptcy

    Congress passed the Bankruptcy Abuse and Prevention Act in 2005 to prevent individuals with the “means” to repay some of their debts from filing Chapter 7 bankruptcy. This test is referred to as the means test. Individuals who do not pass the means test are required to file for Chapter 13 bankruptcy instead. Here are some of the elements that have to be considered:

    • To qualify, your family’s gross income must be lower than the median income for the same size family in your state.
    • Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee’s website.

    Pro Tip: Want an easy way to do this online? Use the Quick Median Income Test

    • If you find that you make too much, you still might qualify after taking the second part of the “means test.” If, after subtracting expenses, you don’t have enough remaining to pay into a Chapter 13 plan, you’ll qualify for Chapter 7.

    The Chapter 7 Means Test

    If your income is more than the average for your household size in Florida, you will need to fill out a second form to see if after deducting certain IRS allowable and some actual expenses you are eligible to file for Chapter 7 bankruptcy.

    If your current monthly income is more than the average, then the “means test” applies a more complicated formula to see if you are allowed to file for Chapter 7 bankruptcy.

    This formula starts with your current monthly income and then deducts some expenses that are allowed. If this calculation shows that you would have money left over each month after expenses, then you might not be allowed to file for Chapter 7 bankruptcy.

    Being precluded from filing a Chapter 7, however, does not mean that you will be prohibited from filing a different type of bankruptcy.

    Read More: How To Pass The Chapter 7 Bankruptcy Means Test

    Considerations When Filing Chapter 7 Bankruptcy in Florida

    To be eligible to file bankruptcy in Florida you must have been domiciled or residing in Florida for at least 180 days immediately prior to filing bankruptcy. 

    Florida is divided into the Southern, Middle, and Northern Districts of Florida. Each district has its own Bankruptcy court. You must choose the district in which you have lived the longest for the preceding 180-day period.

    The Southern District of Florida comprises the counties of Broward, Miami-Dade, Highlands, Indian River, Martin, Monroe, Okeechobee, Palm Beach, and St. Lucie.

    The Middle District of Florida comprises the counties of Baker, Bradford, Brevard, Charlotte, Citrus, Clay, Collier, Columbia, De Soto, Duval, Flagler, Glades, Hamilton, Hardee, Hendry, Hernando, Hillsborough, Lake, Lee, Manatee, Marion, Nassau, Orange, Osceola, Pasco, Pinellas, Polk, Putnam, St. Johns, Sarasota, Seminole, Sumter, Suwannee, Union, and Volusia.

    The Northern District of Florida comprises the counties of Alachua, Bay, Calhoun, Dixie, Escambia, Franklin, Gadsden, Gilchrist, Gulf, Holmes, Jackson, Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Okaloosa, Santa Rosa, Taylor, Wakulla, Walton, and Washington.

    Documents Needed to File Chapter 7 Bankruptcy

    If you’re thinking about filing for Chapter 7 bankruptcy, you’ll need to gather some important documents together first.

    The most important document you’ll need is your credit report. This report will list all of your debts and liabilities, which will help you in preparing the bankruptcy forms.

    You can get a free copy of your credit report, but keep in mind that you may only be able to get one free report per year.

    If you’re working with an attorney in your case, they will normally obtain a copy of your credit report to properly list and classify your debts in the bankruptcy schedules and forms.

    If you are getting ready or considering filing for Chapter 7 bankruptcy in Florida, below you will find a detailed list of bankruptcy documents needed you will need to prepare your bankruptcy forms:

    1. Tax Returns for the past 2 years
    2. Proof of Income for the last 6 months, such as: 
    3. Paystubs 
    4. Social Security Benefits Letter
    5. Pension records
    6. Unemployment Compensation 
    7. Self-Employment income
    8. Child Support and alimony payments
    9. Six (6) months of bank account statements from all accounts where your name appears on.
    10. Copies of your vehicle registration for all your vehicles
    11. Retirement/Pension account statements
    12. Mortgage Statements
    13. Valuation or appraisal of your Real Estate Property
    14. Valuation or appraisal of your Vehicles
    15. List of your household goods and furnishings

    We have compiled the following for your convenience:

    Complete List Of Documents Required To File Chapter 7 Bankruptcy In Florida

    Complete List Of Forms Required To File For Chapter 7 Bankruptcy In Florida

    What To Expect After Your Chapter 7 Bankruptcy

    After filing for Chapter 7 bankruptcy, most collection actions against you will be halted. Wage garnishment, repossession, and foreclosure are all examples of this. However, certain obligations, such as alimony, child support, and taxes, cannot be forgiven in bankruptcy.

    Report of No Distribution

    If the trustee determines that there are no assets to sell, he or she will file a Report of No Distribution with the court within a few days after the 341 Meeting of Creditors.

    Notice of Assets and Notice of Deadline to File Claims

    In Florida, if the Trustee believes there are assets to liquidate, he or she may issue a Notice of Assets and Deadline to File Claims informing creditors that they have thirty days from the date of publication in the official newspaper to file claims with the Court for distribution.

    Unless they request and obtain an extension, Creditors will have 90 days from the date of the Notice to file a claim. The government is allowed more time than non-governmental creditors and has up to 180 days from the date you filed bankruptcy.

    Personal Financial Management Course

    After you file your case, you must complete a Personal Financial Management Course from an authorized education provider and submit a Certificate of Completion with the bankruptcy court within 90 days. If you do not comply, your bankruptcy case will be closed without the entry of an order of discharge.

    Order Of Discharge

    If all goes well, the Court will file an Order of Discharge once you’ve obtained a Certificate of Completion of a Financial Management Course.

    Although bankruptcy is a difficult process, it’s vital to understand that there are resources available to assist you. You may successfully file for bankruptcy and continue with your life if you obtain the appropriate support.

    How Long Does It Take To File A Chapter 7 Bankruptcy Case? 

    The time it takes to file a chapter 7 bankruptcy case is typically around four to six months. Mistakes in the paperwork, delays in court proceedings, and creditor protests are all possible reasons for the delay.

    If you’re thinking about bankruptcy, it’s vital to realize that the procedure can be time-consuming. However, with the assistance of a qualified bankruptcy lawyer, you may rest confident that your matter is handled efficiently and successfully.

    Why Is A Bankruptcy Attorney Important When Filing Chapter 7

    Understanding bankruptcy laws can sometimes be difficult.

    An experienced attorney familiar with the bankruptcy code can do a deep dive into financial records, ensure your bankruptcy paperwork is filed correctly, and work towards a timely and successful bankruptcy discharge.

    A good bankruptcy lawyer will also be able to advise you on whether or not bankruptcy is the right decision, help you navigate the means test, and devise a debt management plan.

    When Filing For Chapter 7 Bankruptcy May Not Be A Good Idea

    If any of the following apply to you, Chapter 7 may not be good for you:

    • You are facing foreclosure and don’t want to lose your home.
    • You have non-exempt assets that you want to keep. 
    • You have the means to pay all or a portion of your debts.
    • You are expecting an inheritance or proceeds from a lawsuit
    • You have committed fraud or tricked someone into giving you credit.
    • You have recently transferred property.
    • You are seeking to discharge your child support, alimony obligations, or other non-dischargeable debts.

    Your bankruptcy attorney can recommend the best course of action, discuss if chapter 7 is advisable, or recommend alternatives to chapter 7 including filing chapter 13 bankruptcy.

    Read More: Chapter 7 vs Chapter 13: Which Is Right For You?

    What Can I Keep After A Chapter 7 Bankruptcy

    When it comes to Chapter 7 bankruptcy, there are certain things that you are allowed to keep and certain things that you are not. It is important to understand exemptions in bankruptcy and secured debt. 

    You are allowed to keep your properly exempted assets when you file for Chapter 7 bankruptcy. The Chapter 7 Trustee will seek to liquidate your non-exempt assets to repay your creditors. The exemptions you use will determine what you can prevent from liquidation. There are federal and state exemptions. You must have permanently resided in Florida for at least 730 days immediately before filing bankruptcy to use Florida exemptions.

    In Florida, the most famous exemption is the homestead exemption, which is used to protect your home.

    You are also allowed to keep any retirement accounts that you have. This includes 401(k) plans, IRA accounts, and pension plans.

    Although may be able to claim your home as exempt using Florida exemptions, if you are behind on your mortgage or in foreclosure proceedings, even though the filing of Chapter 7 may have stopped the proceedings unless you reach a workout such as a loan modification or get current with your mortgage you may still ultimately lose you home to your lender. A bankruptcy attorney can advise you on the correct bankruptcy to file if you are behind on secured debts and do not want to lose your property.

    What Debt Can Be Erased? 

    Chapter 7 bankruptcy can erase the following common debts:

    • Credit card debt
    • Medical bills 
    • Car loan deficiencies
    • Personal loans and payday loans
    • Judgments from credit cards and debt collection agencies
    • Utility bills 

    These debts are known as dischargeable debts.  

    The moment someone files bankruptcy, the automatic stay goes into effect. This temporarily stops anyone from collecting any debts you owe them. 

    What Debt Can’t Be Erased?

    Chapter 7 bankruptcy cannot erase the following types of debts:

    • Child support and alimony
    • Recent tax debts and other debts you owe the government like fines
    • Student loans can usually not be erased

    These debts are known as non-dischargeable debts. 

    Secured debts are those that are linked to a specific property, such as a mortgage linked to a house. As noted earlier, if you want to keep your secured asset while paying off the debt, you’ll have to continue making payments.

    Florida Bankruptcy Chapter 7 Exemptions

    The exemptions in chapter 7 bankruptcy can help protect some of your property and assets. The Florida exemptions can be found in Florida Statutes sec 222. Exemptions must be properly claimed in Schedule C: The Property You Claim as Exempt – Bankruptcy Official Form 106C.

    The most common exemptions include a homestead exemption which allows you to protect an unlimited amount of equity in your homestead property so as long as the property isn’t larger than half (½) an acre in a municipality or 160 acres elsewhere, and you must have owned the property for at least 1215 before you filed.

    There are also exemptions for retirement accounts, vehicles, and other property.

    Read More: Florida Exemptions When Filing Chapter 7 Bankruptcy.

    However, you may not be able to use all of the available exemptions, and you may have to choose which ones to use.

    How Long Does A Chapter 7 Bankruptcy Stay On Your Credit Report

    A Chapter 7 bankruptcy will be reported on your credit report for 10 years. This is a long time, but it’s worth noting that it will eventually fall off. In the meanwhile, you may work to restore your credit so that you can get back on track financially.

    The fact that your bankruptcy is on your credit report does not indicate you will be unable to obtain new loans. For example, a waiting period for a mortgage may be much shorter, and many automobile loan lenders do not require you to wait; you could get an auto loan the next day, even after filing Chapter 7 Bankruptcy.

    For example, The Federal Housing Administration (F.H.A.) and Veterans Assistance also allow consumers to get a mortgage just two years after receiving their discharge.

    Secured Debts vs Unsecured Debt

    When it comes to bankruptcy, there are two main types of debts: secured and unsecured.

    Secured debt is debt that is backed by some form of collateral. This could be a mortgage on your home, a car loan, or a loan against your life insurance policy. If you don’t make your payments on this type of debt, the lender has the right to take back the collateral.

    Unsecured debt is debt that isn’t backed by any collateral. This includes things like credit card debt, medical bills, and personal loans. If you don’t make your payments on this type of debt, the creditor can’t take anything back from you.

    Is Credit Card Debt Included In Chapter 7?

    Generally, credit card debt is considered unsecured debt and is therefore dischargeable in Chapter 7 bankruptcy. This means that if you file for bankruptcy and have credit card debt, the court will wipe the slate clean and you will no longer be responsible for paying it back.

    However, there are some exceptions to this rule. For example, if you have been abusing your credit cards and running up large balances in anticipation of filing for bankruptcy, the court may decide not to discharge the debt.

    How Much Does Chapter 7 Bankruptcy Cost?

    If you are considering filing for Chapter 7 bankruptcy, you should be aware of the costs involved. The two main costs are court fees and attorney’s fees. There is a $338 court filing fee, and this fee is the same throughout the United States.

    If you can’t pay the fee, you can request a fee waiver from the court. To qualify for a waiver, your income must be less than 150% of the federal poverty guidelines.

    You can also make a down payment on the filing fee and pay the rest in installments. However, if you miss a payment, the court can dismiss your case without a refund. Unless you have to file quickly, we recommend having the full amount before filing to prevent late payment.

    In the Southern District of Florida, the average chapter 7 bankruptcy attorney’s fee is $1500. At Stiberman Law our chapter 7 bankruptcy attorney’s fees range from $900 to $1500 to file. We offer convenient payment plans in the event you cannot afford the full fee.

    How Does Chapter 7 Compare to Debt Consolidation?

    The two most popular types of debt relief are Chapter 7 bankruptcy and debt consolidation.

    Chapter 7 bankruptcy is a legal process that wipes your slate clean and releases you from all responsibility for your unsecured debts. This means that if you file for Chapter 7 bankruptcy, the court will wipe the slate clean and you will no longer be responsible for paying any of your unsecured debts.

    Debt consolidation is a process where you take out a loan to pay off your existing debts. This loan is typically at a lower interest rate than the rates you are currently paying, and it allows you to make one monthly payment instead of several.

    In Conclusion

    Chapter 7 bankruptcy is a legal process that wipes your slate clean and releases you from all responsibility for your unsecured debts. This means that if you file for Chapter 7 bankruptcy, the court will wipe the slate clean and you will no longer be responsible for paying any of your unsecured debts.

    Both Chapter 7 and Chapter 13 bankruptcy have their pros and cons, and the best option for you will depend on your individual financial situation. If you are considering either of these options, we recommend speaking with a bankruptcy attorney to get expert advice.

    Read More: Pros and Cons of Chapter 13 Bankruptcy

    Contact the Stiberman Law Firm, Florida’s Most Experienced Bankruptcy Attorney

    If you are considering filing for Chapter 7 bankruptcy, please contact our office for a free consultation. We can help you determine whether Chapter 7 is the right option for you, and we will guide you through the entire process. Call us today at (954) 758-4324 or fill out the form below.

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