Bankruptcy Laws Chapter 7 BankruptcyPosted on: March 28, 2017 at 2:26 pm
What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is the most common type of bankruptcy and referred to as a “liquidation bankruptcy.”
In Chapter 7, all of your assets are turned over to a bankruptcy trustee for sale. However, you are entitled to certain exemptions under Florida and Federal law.
For example, Florida could provides you with Homestead exemptions in the amount of $130,000.00 per spouse. So, if you have equity in your home, don’t worry . . . you can keep your home even if you file for bankruptcy.
There are also other personal property exemptions in the State of Florida. If you decide you want to keep your home, you are entitled to a $1,000 personal property exemption. That includes your “stuff” such as clothing, furniture, and other personal items. If you decide to “surrender” your home, you are entitled to a “super exemption” in the amount of $4,000.
So if you have an asset that you want to protect, (e.g. a car that is paid off), you can use the super exemption if you don’t own real estate. Most Florida Chapter 7 debtors have little non-exempt personal property because of Florida’s liberal exemption laws.
Chapter 7 Bankruptcy is used to eliminate unsecured debts such as credit cards or medical bills. Chapter 7 does not eliminate secured debts, such as vehicles unless the secured item is surrendered. Chapter 7 will not save a house from foreclosure or a car from repossession if you are delinquent in payments.
Under the new Bankruptcy law, only people who pass the “Means Test” may file a Chapter 7 Bankruptcy. People who fail the Means Test have to file Chapter 13 Bankruptcy provided they are under Chapter 13 debt ceilings. The Means Test is a complicated mathematical formula.
At FL Legal Group, our attorney can run the Means Test after collecting the necessary income and expense information from you.
A Chapter 7 Bankruptcy would discharge most of your debt without a repayment plan. However, this option will not save your home from foreclosure, in which case a Chapter 13 bankruptcy would be the more appropriate and would help save your home from foreclosure.
If you obtain a loan modification and have additional credit card debt, you can still file for Chapter 7 bankruptcy and keep your home.
In the end, Chapter 7 provides you with a fresh start.
Contact FL Legal Group Today for an Assessment of Your Bankruptcy Options
Call FL Legal Group today to learn about the options available to you, and let us help protect your legal rights.
FL Legal Group is a full service law firm, practicing in the areas of Real Estate Law, Condo and HOA laws, and Construction Law, Foreclosure, Bankruptcy, Loan Modifications and Short Sales. Our main office is located in Tampa at 501 E Kennedy Blvd., Tampa, FL, 33602.
Call 800-984-9951 to schedule a consultation. You may also reach a member of our staff via email at Contact@FLLegalGroup.com
Author: Nicki Asmer