Florida Chapter 7 Bankruptcy

What happens in a Florida Chapter 7 bankruptcy? What kind of debt is eliminated by filing Chapter 7 bankruptcy in Florida? Who can file Chapter 7 bankruptcy? Ask Chapter Seven bankruptcy questions here.

Ask Chapter 7 Bankruptcy Questions Here

Chapter 7 bankruptcy is a liquidation. The bankruptcy trustee will seize any non-exempt assets (You'll find Florida Bankruptcy Exemptions listed here), sell them and distribute the proceeds among your creditors. Any dischargeable debt that remains is eliminated.

You never pay it. Ever.

On that note, I'd like to remind you to save your discharge papers and all of your bankruptcy paperwork forever. To prove it was discharged in the event that a former creditor attempts to collect years later.

Chapter 7 Bankruptcy Florida
Debts Which Can Be Discharged

Debts You Cannot Discharge in Chap. 7

You need to stop using your credit cards at least 3 months before you file for Chapter 7 bankruptcy.

Who Can File Chapter 7 Bankruptcy?

Florida Chapter 7 bankruptcy is a way for Florida residents with few non-exempt assets to get out of debt.

The biggest hurdle standing between overextended FL residents and debt freedom is the means test.

This is a complex calculation of income vs outgo. If your income is below the current Florida median income, you should not have a problem passing the means test.

The median income for Florida was lowered in early 2011. The economy is still very bad here. If the economic situation worsens, the median income may fall further making it harder to pass the means test in the near future.

If your income is right at the median, you may want to file sooner rather than later.

If your income is above the state median, download Bankruptcy Strategies and skip ahead to the strategies for passing the means test.

Florida Chapter 7 Bankruptcy
What Happens When You File?

1. You list all your creditors and the balance of the loans.

2. You provide proof of all income for the 6 months prior to your filing date.

3. You provide bank statements (all accounts) for the 6 months prior to your filing date.

4. You will turn all of the aforementioned papers over to your Florida bankruptcy lawyer along with a list of your living expenses. I keep all my bills so I just added up the previous 6 months and averaged them to get these figures.

Chapter 7 Tip:

Your income needs to exceed your expenses but not by too much or you may not pass the means test.Due to the changes made to bankruptcy code in 2005, you will now have to complete 2 credit counseling courses: a pre-filing course and a post-filing course.

These courses can be completed online. They take several hours each and will cost you $25-$50 each. If you do not complete both courses and obtain the certificates, your discharge will be denied.

Once you complete the pre-filing course and file for bankruptcy, the Florida bankruptcy trustee will schedule a meeting of the creditors at the Florida bankruptcy court where your case was filed.

You and your attorney will also attend this meeting. Creditors are rarely present, by the way.

I was needlessly afraid of this. It turned out to be pretty uneventful.

You sit in a room full of other filers and their lawyers and wait for the trustee to call you up. Once your turn comes, you go up, answer a few questions and leave. The whole thing takes about 15 minutes.

This is what the Florida bankruptcy trustee asked us: "Are you expecting an income tax refund and if so how much are you expecting? Do you expect to inherit or come into money for any other reason in the next 6 months?"

I mention these specific questions because I did not expect them. I should have. My lawyer should have asked me this before I filed.

I don't usually get much back but some people get thousands. If you are 1 of these lucky tax payers, be sure to read Tax Returns After Bankruptcy before you file.

After your 341 meeting, you just go home and go on with your life. Under normal circumstances, you will receive a notice in the mail telling you that your bankruptcy case has closed and that you have received a discharge within 90 days.

If there is any possibility that your case may be dismissed, your lawyer will have made you aware of that. Either way, the Florida bankruptcy court will send you a letter.

After Your Florida Chapter 7 Bankruptcy Closes

Do not inherit or win money during this time frame if you can avoid it.



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