What is Chapter 7 Bankruptcy? Qualifications and How to File

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Written by: Attorney Robert Stiberman.
Updated January 20, 2023

Chapter 7 bankruptcy is defined as a liquidation bankruptcy and it is the most common bankruptcy filed in the United States. In 2022, 239,750 Chapter 7 bankruptcies were filed in the U.S. as of June 30, 2022. See United States Courts – Bankruptcy Filings.

If you are unable to pay credit card and medical bills, or you’re tired of endless phone calls from collection agencies, and worried that you’ll never be able to escape debt, filing for bankruptcy may be the right decision. Florida chapter 7 bankruptcy lawyer,  Robert Stiberman can help you navigate this process so you can file a chapter 7 and begin building a stronger financial future.

Chapter 7 bankruptcy in a nutshell

It can be filed by businesses and individuals. Your nonexempt property is used towards repaying your creditors. Most bankruptcies are deemed no-asset cases where you can eliminate your dischargeable debts without losing any property.

What you get to keep is governed by exemptions. Florida has some of the best exemptions in the country such as the Florida homestead exemption. The bankruptcy process takes about four months from start to finish.

Eligible Debt

  • Medical bills
  • Credit card debt
  • Payday loans
  • Old utility bills
  • Personal loans or small business loans
  • Taxes (in some instances)
  • Vehicle repossession debts

Debt That Can’t Be Discharged

  • Most student loans
  • Income tax debts or property tax debt
  • Alimony
  • Child support and alimony
Robert Stiberman Florida chapter 7 bankruptcy lawyer

Robert A. Stiberman. Attorney with over 20 years of experience in bankruptcy law.

Who qualifies for Chapter 7 bankruptcy? Should I file for chapter 7?

As per the bankruptcy code, you must pass the means test to qualify for chapter 7 bankruptcy and complete a debtor education credit counseling course. Your household income is compared to the median income for a family of your size in your state. It is based on your average monthly income for a six-month period immediately preceding filing.

The means test aims to determine if you have disposable income that can be applied to repay your debts. If when comparing your income you fail to pass the means test, there is still a chance you may qualify by taking the second part of the means test and overcome the presumption of abuse.

If you are unable to satisfy the means test, then you may still be eligible to for bankruptcy, but not chapter seven. Folks wishing for an immediate start typically fall into two categories:

Who should wait to file?

If you recently received a bonus that affects your six month average means test income calculation, you may consider waiting a bit before filing bankruptcy to qualify for chapter 7. Also, if you feel that your financial struggles are temporary you may want to consider entering into payment plan with your creditors instead. Some credit card debts can be negotiated.

There other factors that a bankruptcy attorney can discuss with you such not paying or using any credit cards at least four months before submitting your bankruptcy, the effect of transfers or debt repayment, settlements, personal injury claims or lawsuits you may have against someone, and other factors that may affect a successful outcome.

Also, if you are concerned about your credit score, bankruptcy will impact your credit but many clients the their credit score increase when they pull a credit report after bankruptcy.

Should I file Chapter 7 bankruptcy right now?

You may need to file for chapter 7 bankruptcy if you do not own any costly non-exempt assets and you are facing a wage garnishment, civil lawsuit, license suspension, and you feel you will not be able to repay your unsecured debts. Your chapter 7 lawyer will review if you have any nonexempt property. Harassing calls from creditors must stop the moment you file.

Chapter 7 vs. Chapter 13 bankruptcy

Unlike chapter seven bankruptcy, Chapter 13 bankruptcy is a reorganization bankruptcy where your disposable income is applied to repay your debts. There are certain things you can do in a Chapter 13 with secured debts that you cannot due when you file for chapter 7 such as:

  • In chapter 13 you can catch up on missed mortgage payments over a 3 to 5 year period. Same applies for property taxes, HOA dues, car payments, and child support.
  • Reducing the interest rate on financed vehicles. See Chapter 7 vs Chapter 13 bankruptcy: Which is right for you?for a detailed discussion of the difference between chapter 7 and 13.
  • Unlike in a 7, Chapter 13 requires regular income to fund the plan.

How often can I file chapter 7?

Absent a court order to the contrary, there is no limit on the number of times you may file for chapter 7, but if you are seeking to discharge your debts (which is the most common reason to file) and have received a discharge in a previous 7, you will have to wait 8 years from the date of that filing. The time restrictions are different between different chapters vary. See How Often Can you file for bankruptcy? for a more detailed discussion or speak with one of our experienced chapter 7 lawyers.

How much does filing Chapter 7 bankruptcy cost?

Updated 2023, Chapter 7 filing fees are $338.00. The fees are due at the time of filing and in Florida you may apply to pay the fees in installments or, if you earn more than 15% below the national poverty line, you may apply to waive the fee.

Addtionaly, you are required to complete an online or telephonic credit counseling course 180 days before filing and a financial management course to obtain your discharge after you file which can range from $10-45, Course providers may also waive fees if based on income. You can obtain a credit report for free once per year. Attorneys fees can vary depending on the complexity of your case and most attorneys have affordable payment plans when required.

Alternatives to Chapter 7 bankruptcy

The best course of action is determined by your finances and the type of debt you owe. If you cannot pay your creditors, you may be able to enter into a debt management plan, negotiate with your creditors and reach a payment arrangement. In some instances you may be able to consolidate your debts or obtain family assistance to satisfy your debts. An attorney or agency can discuss debt relief options.

What is life after bankruptcy? How long does Chapter 7 bankruptcy take?

It takes about four to five months from start to completion. Many people find their credit scores increase after bankruptcy. Some clients receive credit offers within months of obtaining their discharge. Completing bankruptcy often lifts a weight that people have been carrying for a long time.

Chapter 7 Bankruptcy discharge

An Order of discharge represents that you have no personal liability as to the dischargeable debts listed in your bankruptcy forms and that those creditors can no longer collect from you. The bankruptcy court may deny a discharge for for reasons including: failing to cooperate with the trustee, hiding assets, or engaging in other activities with the intent to hinder, delay or defraud creditors. Addtionaly, unless excused by the court, you must complete the second debtor education or financial management course, which is in addition to the credit counseling course you completed before you filed, to obtain a discharge.

Chapter 7 Property exemptions

Exempt property can be protected but it must be properly claimed as exempt in you bankruptcy forms. A chapter 7 trustee can seek to liquidate your nonexempt assets to pay creditors. When you hire a chapter 7 attorney for your bankruptcy case it is critical to discuss the bankruptcy laws of exemptions and what you can expect ion your case. Florida has many exemptions including the homestead exemption, the $1000 motor vehicle exemption, and the $4000 wildcard exemption where applicable. you can learn more about exemptions here.

What do you lose in Chapter 7 bankruptcy?

Bankruptcy can have serious consequence and you should always consult with an experienced chapter 7 lawyer before doing anything. As the term liquidation implies, any asset that is nonexempt can be liquidated or sold by your bankruptcy trustee. As an example, Florida has a $1000 motor vehicle exemption. This means that if you have a vehicle with more than $1000 in equity and you cannot apply any other available exemptions to protect the vehicle, you will have to pay the bankruptcy trustee the nonexempt amount if you want to keep you vehicle. Note: in chapter 13 bankruptcy, the Trustee will not seek to liquidate your assets.

How does Chapter 7 Bankruptcy work?

So pulled a credit report, passed the means test, completed the credit counseling course, saved up to pay the filing fee, and signed all the bankruptcy forms. Once the petition is filed you will receive a case number and a trustee will be assigned to your case. You are now referred to as the Debtor in the case. While you are in bankruptcy, absent court permission, civil actions such as personal lawsuits and wage garnishment are temporarily suspended.

A few days after filing bankruptcy, the debtor will receive a notice in the mail with a meeting of creditors date where your trustee and other creditors will have an opportunity to ask the debtor questions. The meeting usually takes place within 45 days. As of 2022 the meeting of creditors are conducted telephonically in the Southern District of Florida.

At or shortly after the meeting, the Trustee will advise the debtor if he or she seeks to liquidate any property and any willingness to entertain offers if you want to retain those assets. The Trustee will file a report of no distribution if there is nothing to liquidate or if the trustee does not intent to seek to liquidate any non-exempt assets.

You (the Debtor) will be required to complete a second credit counseling or financial management course from an approved agency to to be eligible to receive your discharge.

Can I keep my property if I file Chapter 7 bankruptcy?

Many cases are no asset cases where you get to keep your property. Any property you wish to keep must be properly claimed as exempt to defend against the trustee. Depending on how long you have resided in Florida, you may be required to claim Florida or Federal exemptions. Consider to file a chapter 13 bankruptcy if you want to ensure keeping your assets.

Chapter 7 Bankruptcy Pros and Cons


  • Very quick 90 to 120 day process from filing to discharge.
  • Most cases are no asset cases so there is little or no liquidation of property (each case is different so consult with your lawyer).
  • Florida has some of the strongest exemption in the country.
  • There is no limit on the amount of debt you can eliminate.
  • It is a relative low cost to File.
  • Discharges most unsecured debts such as credit card debt and other personal debts.


  • You have to pass the means test to be eligible.
  • Secured debts such as mortgages and car notes must be kept current to avoid risk of losing the secured asset.
  • It involves the liquidation of your nonexempt assets to pay your creditors
  • Not all debts are discharged. It does not eliminate all debts such as student loans, and child support and alimony.
  • It stays on your credit for up to 10 years (although many of our clients obtain new credit with a few months after obtaining their discharge).

Contact a Florida Chapter 7 Attorney

If you’re considering Chapter 7 Bankruptcy, you need to speak with a attorney at Stiberman Law. The consultation is completely free.


Foreclosure and Chapter 7

If you own a home, your main concern about filing for bankruptcy is whether or not you will lose your home. This depends on whether you have been able to remain in good standing with your mortgage. If you are maintaining your house payments for your primary residence, you will most likely get to keep your property.

However, if the foreclosure process has started, filing for bankruptcy pauses the proceedings temporarily. Once it has been finalized, or if the bank obtains permission from the bankruptcy court, the bank will be able to continue with the foreclosure process.

This may give you additional time to find a new place to live. It’s important to speak with a Chapter 7 Bankruptcy Lawyer to get more personalized insight into your unique situation so you have a better idea of whether your house is safe from foreclosure or being seized during the liquidation process.

Is Chapter 7 Bankruptcy Right for You?

Many of our clients searched the web for a “bankruptcy lawyer near me” looking for  information and advice on Chapter 7 bankruptcy. Chapter 7 bankruptcy is not available to everyone as there is a means test to limit the number of people who are eligible for debt elimination.

Eligibility is determined by checking whether your household income is below the median income of your state. For example, as of the time of this article, the median income for a family of four in Florida is approximately $89,206.

The court will also look at your necessary or allowable expenses, such as the cost of housing, groceries, and medical care to determine your disposable income that could be used to pay off your debts.

If your disposable income is determined to be enough to pay off some or all of your debts, you may be ineligible for Chapter 7 and filing for Chapter 13 bankruptcy may be the better option.

Even if you are eligible to file, it may not be right for you. For example, if the majority of your debt is due to federal student loans that cannot be discharged, or you have nonexempt valuable property, you should consult with an experienced Chapter 7 lawyer to discuss the right steps for your financial future.

Do You Need a Chapter 7 Lawyer to File for Bankruptcy?

Legally, you do not have to have a lawyer to file for bankruptcy on your behalf. However, it is highly recommended that you have an attorney who can help you navigate the process, explain what you can expect, and advocate on your behalf.

A Chapter 7 lawyer will:

  • Be available to answer questions specifically based on your unique circumstances.
  • Inform you of the documentation and information you will need before your court date.
  • Help you set reasonable expectations and know what to expect for the outcome of your filing.
  • Work to protect as many of your assets as possible.
  • Be present in court to advocate for you against your debtors.

At Stiberman Law, we have over 20 years of experience in helping people just like you navigate bankruptcy and come through the process with financial freedom and a clean slate.

Frequently Asked Questions About Chapter 7 Bankruptcy

We understand that this is confusing and you probably have a lot of questions about filing for Chapter 7 bankruptcy. To provide a bit more clarity, we’re answering our most frequently asked questions.

Chapter 7 bankruptcy attorney Robert Stiberman is here to answer all of your questions.

How Much Does Chapter 7 Cost?

It costs between $900 to $1500 in attorney’s fees based on the complexity of your case. Additionally, there is a mandatory minimum fee of $338 to file for Chapter 7. In addition to this, you must take a mandatory debt counseling course and personal finance course that equal to around $50.

Many bankruptcy lawyers, including Stiberman Law do provide these courses as part of our services and included in the price.

Will I Lose My House?

It depends. If the foreclosure process has already started, filing for Chapter 7 bankruptcy will pause the proceedings, but they will restart after your bankruptcy proceedings are complete.

What happens if I don’t make my car payments?

We’ve heard people say “my car was never repossessed after chapter 7” even though the debtor surrendered the vehicle. Some lenders take longer than other to repossess a car once they have court permission (if in bankruptcy) or without the need for court permission if the automatic stay is not in effect.

How can I find bankruptcy lawyers in my area?

When searching online for “bankruptcy lawyers in my area”, it is a good idea to see how long the bankruptcy attorney has been practicing in your area and if the attorney offers a free consultation to discuss your options. Another way to find an attorney near you is to contact your local bar association for bankruptcy attorney referrals. Simply tell them a little about your situation and that you are looking for an attorney near you for legal assistance.

How much cash can you keep when filing chapter 7?

You are allowed to keep up to $1000 in cash and personal property when filing Chapter 7 bankruptcy with Florida exemptions. You may also be able to keep up to $5000 in cash if you are not claiming the Florida homestead exemption and are applying the $4000 wildcard exemption. Lear more about bankruptcy exemptions and how much you can protect here.

Bankruptcy Attorney Robert Stiberman in Miami Office

If you remain in good standing with your mortgage company and keep up with payments, you will most likely get to keep your home.

Will I Lose My Car?

This depends on the amount of equity you have in the vehicle.The state of Florida allows you to exempt up to $5,000 in personal property if you don’t own a home. This means that if you own your vehicle without a loan and it’s worth less than $5,000, this is exempt and you will keep your vehicle.

Similarly, if your car is worth $15,000, but you owe $11,000, you only have $4,000 in equity, thus you would keep your car if it is in good standing with your lender.

How Long Does Chapter 7 Stay on My Credit?

It stays on your credit for 10 years, but your credit score will improve over time if you stay in good standing with any other debts you may accrue following the bankruptcy.

Are Student Loans Discharged During Chapter 7 Bankruptcy?

If you have federal student loans, you can not typically discharge these in bankruptcy. However, discharging other debts in conjunction with an income based repayment plan can help you get back in good standing with your student loan provider.


Experienced Chapter 7 Bankruptcy Lawyers in Florida

If you need filing for Chapter 7 Bankruptcy, our attorneys can help you.

We offer comprehensive Chapter 7 Bankruptcy services by our experienced attorneys.

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The decision to file for bankruptcy is difficult and the process can be overwhelming. Schedule a free consultation with an experienced Chapter 7 lawyer at Stiberman Law today and learn more about your options. In addition to having an advocate on your side to fight for your best interest, we offer affordable prices and sensible payment plans to help you through this experience so you can achieve financial freedom. Call us today at Call us: (954) 758-4324 or fill out our contact form to get started.

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