How to File Chapter 7 Bankruptcy in Florida | Alper Law


What is Chapter 7 Bankruptcy?

In Florida, Chapter 7 Bankruptcy is the legal procedure where the debtor ’ s unbarred debt is discharged after the debtor ’ second non-exempt assets have been liquidated. To file a chapter 7 bankruptcy in Florida, a person must be a permanent Florida resident or own place in the state .
Florida has three bankruptcy districts ( Southern District, Middle District, and Northern District ), and each of Florida ’ south counties is assigned to one of the three bankruptcy districts. People must file bankruptcy in the zone and local anesthetic division where they reside .

Understanding Chapter 7 Bankruptcy

Filing chapter 7 bankruptcy in Florida includes the following steps :

  1. Prepare the bankruptcy petition. The petition includes all the information about your debts, your income, and your assets.
  2. Automatic Stay. Also called a “suggestion of bankruptcy,” the automatic stay stops all collection efforts against you during the bankruptcy process.
  3. Relief from Stay. Mortgage creditors and other unsecured creditors can seek relief from the stay to foreclose on their secured property.
  4. Assignment to a Chapter 7 Trustee. The bankruptcy case is assigned to an Orlando bankruptcy trustee. A meeting is held in a conference room with you, your bankruptcy attorney, and the trustee. The trustee will ask general questions about all of the information in your bankruptcy petition.
  5. Objection to Exemptions. The bankruptcy trustee can assert objections to any exemptions claimed in the bankruptcy petition.
  6. Adversary Claims. A trustee or a creditor can file an adversary claim if a creditor does not think a debt should be discharged or if a creditor thinks you have abused the bankruptcy process. This does not happen often.
  7. Bankruptcy Discharge. Any non-exempt assets will be sold by the bankruptcy trustee in a Chapter 7 case. Your dischargeable debts will then be discharged by the bankruptcy court. This means you would no longer owe the debt.

Filing bankruptcy is not a easily as simply filling out bankruptcy forms. There are some areas of bankruptcy police that are most frequently the national of debtor questions. These areas include the means test, discharge of income tax indebtedness through bankruptcy, lawyer fees, avoiding common bankruptcy mistakes, and other frequently asked questions.

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Florida Bankruptcy Exemptions

Most people who file chapter 7 bankruptcy in Florida are eligible to claim Florida bankruptcy exemptions .
In Florida bankruptcy, exemptions that apply are determined by the state where the debtor has been domiciled for the 730 days ( two years ) immediately preceding the file date .
Some bankruptcy debtors who are Florida residents when they file for chapter 7 bankruptcy are not entitled to Florida exemptions because they have not lived in Florida during the preceding biennial period. Those debtors must claim bankruptcy exemptions allowed by the state in which they were domiciled for 180 days immediately preceding the biennial period, or the department of state in which they were domiciled for the longer parcel of such 180-day period .
In other words, a person filing bankruptcy in Florida nowadays is eligible for the property exemptions he could have claimed if he had filed two years ago .
If this person was a Florida resident two years ago, he claims Florida exemptions nowadays ; if two years ago the debtor resided in a unlike state, then they are entitled to the exemptions of the department of state of their prior residency ( or federal exemptions if that state has residency requirements for the consumption of its exemptions ) .
Important: Federal bankruptcy police can invalidate exemptions over property that is converted to exempt within certain time periods before file .

How the Homestead Exemption Works in Florida Chapter 7 Bankruptcy

The Florida Constitution exempts a Florida homestead of unlimited rate from liens and execution. A debtor may protect unlimited amounts of money invested in a homestead property. A debtor may invest money into an exempt homestead flush after being sued. These homestead rules apply in state motor hotel collection proceedings. Bankruptcy law does not affect Florida ’ s outright homestead exemption in state of matter court proceedings .
But bankruptcy law is a federal law, and union jurisprudence may supersede state law in certain cases. The Florida homestead exemption is applied differently in a chapter 7 bankruptcy than in Florida state woo .
There are some respect ceilings and purchase deadlines applicable to Florida ’ s homestead exemption in chapter 7 bankruptcy. Under union bankruptcy law, the debtor ’ randomness Florida homestead is exempt up to a value of approximately $ 160,000 ( 2020 ) unless the debtor occupied his current Florida homestead property and former Florida homestead properties for a continuous 40-month period prior to filing bankruptcy. Joint bankruptcy debtors can protect approximately $ 320,000 of a jointly owned homestead. ( 2020 ) These numbers increase from time to clock time, so debtors should get the current limits from their bankruptcy lawyer. chapter 7 bankruptcy debtors are entitled to an outright homestead exemption if they have occupied their Florida homestead for more than 40 months prior to file .
Under Florida bankruptcy law, a debtor ’ randomness investment of non-exempt money in a homestead property within ten years of filing bankruptcy may be challenged by the bankruptcy trustee if the transfer was intended to defraud creditors .
Florida chapter 7 bankruptcy procedures

Chapter 7 Bankruptcy Petition

A debtor initiates a chapter 7 bankruptcy by filing a petition with the bankruptcy court. The bankruptcy petition is a universal federal form that covers substantial fiscal information about the debtor and his syndicate. Debtors must sign their petitions under oath .
The bankruptcy Petition requires the debtor to list all his unbarred debts individually from his secured debts. Unsecured debts include personal loans and credit cards issued by banks, such as Visa, MasterCard, American Express, or Discover, and other credit cards used to purchase consumable items. Vehicle leases, aesculapian bills, and personal loans are besides unguaranteed debts. Tax debt is besides unguaranteed until the IRS issues a tax lien .
Secured debts include those debts where the creditor has a security interest in the debtor ’ s property to guarantee requital. Examples of guarantee debts include mortgages, car loans, and loans from finance companies ( normally secured by family items ). If a debtor has purchased goods using a store citation card, such as a poster from Rooms to Go, Best Buy, and so forth, the store credibly has a security matter to in certain items purchased, making the shop a batten creditor .
The debtor must indicate on the bankruptcy Petition whether they want to either reaffirm or redeem each batten debt or surrender the guarantee property to the secured creditor. A bankruptcy debtor is entitled to keep any procure property if the debtor continues to pay the loanword for that property on time. If, however, the debtor elects to surrender the batten property, the secured creditor may not thereafter recover any money from the debtor .
Attorney working on a Chapter 7 bankruptcy in Florida

Florida Chapter 7 Bankruptcy Procedures

The chapter 7 bankruptcy debtor is required to list all liabilities, no matter how outside. The request should list any claim that anyone might have against the debtor, flush if the claim has not so far matured. For exercise, if the bankruptcy debtor is a co-debtor on a note, has personally guaranteed corporate or other debt, or is secondarily apt on a mortgage that a buyer has assumed, the debt should be listed along with a brief explanation of the liability. Disputed debts and liabilities should besides be listed. besides, if the debtor has ever had a home mortgage insured by a government agency ( such as the VA ), the petition must list that representation as a contingent creditor. This should be done tied when person purchased the property and assumed the mortgage since they might default, and the VA could decide to pursue a title against the debtor .
The inaugural step in the chapter 7 bankruptcy is the file of the request. The file of a chapter 7 bankruptcy creates a bankruptcy estate of the realm. The bankruptcy estate refers to all of the debtor ’ south non-exempt place subjugate to administration by a bankruptcy regent. A regent is randomly appointed by the court immediately upon the filing of a chapter 7 Petition. The chapter 7 regent is normally a private lawyer or CPA. The regent ’ s job in chapter 7 bankruptcy is to gather all of the debtor ’ s non-exempt assets, sell those assets ( to either the debtor or an outside party ), and distribute the proceeds among the debtor ’ second scheduled unbarred creditors .
Exempt assets, such as the debtor ’ south homestead and IRA, are not separate of the bankruptcy estate, and the regent can not interfere with excuse assets .
An automatic rifle bide is imposed immediately upon the filing of a chapter 7 bankruptcy. The stay prohibits creditors from pursuing legal action against the debtor and stops all creditor legal collection efforts. The bankruptcy lawyer can file a suggestion of Bankruptcy in ongoing civil lawsuits involving the debtor. The suggestion of Bankruptcy suspends all such litigation. Debtors need to provide their lawyer with a copy of any lawsuits filed against them so that the lawyer may prepare a suggestion of Bankruptcy .
In Chapter 7 bankruptcy cases, mortgage creditors typically file a motion for relief From Automatic Stay so that they may foreclose on procure property if the debtor does not make payments on time. The bankruptcy motor hotel will normally grant this movement. The creditor can take the bankruptcy debtor ’ second place only if the debtor does not pay procure loans in a seasonably manner, and alone after the creditor forecloses its spleen in state court .
Florida chapter 7 bankruptcy automatic stay

Means Test

The Florida bankruptcy means examination is a complex formula to determine eligibility to file chapter 7 bankruptcy. Debtors whose family income is under their state ’ s median income, and debtors whose debts are primarily business-related, are exempt from means test reservation. Bankruptcy debtors whose crying family income is above median income must pass the means test to file chapter 7 bankruptcy .

Meeting the Chapter 7 Bankruptcy Trustee

The bankruptcy court will schedule a meeting with an appointed chapter 7 trustee. This suffer is called the creditors ’ meet or the 341 meet. The meet is held in a conference room, not a court. typically, this meeting will last ten to fifteen minutes .
A example of the U.S. Trustee ’ second function ( a unlike regent ) sometimes attends these meetings. The debtor and his bankruptcy lawyer must attend the creditors ’ touch ( if file jointly, both spouses must attend ). As a practical matter, very few, if any, unbarred creditors attend. The chapter 7 bankruptcy regent represents all creditors whether or not unbarred creditors attend the meeting of creditors.

The chapter 7 bankruptcy regent asks the debtor questions at the creditors ’ meet, but they will not interrogate, cross-examine, or threaten the debtor. The regent may ask the debtor why they filed bankruptcy and ask questions about their assets and sources of income. The trustee frequently asks about the debtor ’ s income and expenses to make surely the debtor qualifies for chapter 7 bankruptcy and that the bankruptcy is not an abusive filing .
Creditors ’ meetings are scheduled by the court based on the trustee ’ second schedule. Your bankruptcy lawyer is not able to request a meet date or time. If the debtor or their lawyer can not attend the scheduled 341 meet, the regent normally schedules a “ makeup ” meet approximately two weeks after the foremost date. If the debtor fails to attend the second meet, the regent may move to have the bankruptcy dismissed .

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Objections to Debtor’s Bankruptcy Exemptions

The chapter 7 bankruptcy regent has 30 days after the conclusion of the creditors ’ meeting to object to any exemption of property the debtor has claimed on the bankruptcy Petition .
If the regent objects to a claim exemption, the court will set a hearing at which time the debtor has the opportunity to support the exemption. Absent a regent objection within 30 days after the file date, all property the debtor claimed as nontaxable on the prayer, including homestead, is exempted in bankruptcy and is not part of the bankruptcy estate .

Adversary Claims and Objections

If a creditor believes its debt should not be discharged, it may file “ an adversary ” case during the bankruptcy proceed. The most common flat coat for a creditor filing an adversary lawsuit is imposter .
imposter in this context is not criminal. In this context, “ fraud ” means that the debtor abused his kinship with the creditor and bankruptcy process. Fraud supporting a creditors discharge expostulation could, for exercise, refer to a bankruptcy debtor who used a credit tease to buy property or take cash advances anterior to filing bankruptcy when the debtor was financially insolvent .
If a debtor incurred a debt when the debtor planned to file bankruptcy, the creditor could have a basis to set aside a discharge of that debt for fraud during an adversary casing .

Reaffirmation Agreements in Chapter 7 Bankruptcy

A chapter 7 debtor must file, within 60 days of the 341 meet, a reassertion agreement for all secured property, such as cars, the debtor wants to retain. If the debtor does not sign the reassertion agreement or redeem the place within 60 days, the automatic stay is lifted as to that property, and the creditor is permitted to repossess the property, even if the debtor ’ south payments are current .
A reassertion agreement states that the debtor agrees to remain personally liable to pay the debt after the bankruptcy is over. If the debtor does not sign a reassertion, the chapter 7 bankruptcy will wipe out the debt, but the plug creditor can take the secure property .
The debtor ’ mho bankruptcy lawyer will normally co-sign a reassertion agreement if the lawyer believes the debtor has sufficient disposable income to pay the guarantee debt after the bankruptcy is concluded. The lawyer may choose not to sign a reassertion agreement if the debtor has negative disposable income or if the lawyer believes the debtor ’ s reassertion of the indebtedness would create an undue hardship .
Suppose the bankruptcy lawyer does not approve and co-sign a reassertion agreement. In that case, the Florida bankruptcy judge will review the reassertion agreement and either approve or deny the agreement, sometimes after an evidentiary hearing. The bankruptcy judge will deny reassertion if he believes that reassertion is not in the debtor ’ mho best interest for a “ fresh start. ”
even if the court refuses to approve a debtor ’ second reassertion, many creditors will let the bankruptcy debtor keep the procure place a retentive as payments are current .

Keeping Your Car in Bankruptcy

redemption is how a debtor can keep their car in bankruptcy. chapter 7 bankruptcy gives debtors a different option regarding loans secured by personal place. The debtor may “ redeem ” secured personal property such as furniture, computers, automobiles, or early property purchased on credit and secured by a spleen in favor of the creditor .
redemption means purchasing the property from the secured creditor at its current fairly marketplace respect. redemption can be financially beneficial for the debtor when the property ’ s fairly market respect is less than the amount due under the loanword .

Executory Contracts During Chapter 7 Bankruptcy

An executory contract is a legal term referring to a contractual agreement that both parties are obligated to perform in consideration for a profit ( such as a cable car lease or a residential lease ). Executory contracts do not include “ at-will ” contracts such as an employment agreement or a personal service abridge .
chapter 7 bankruptcy permits the debtor, or the trustee, to assume or reject an executory contract. A debtor must decide if they want to remain apprenticed by their executory contracts anterior to the court ’ second issue of a bankruptcy release which normally happens about 90 days after file .
A car lease is an example of an executory contract. If the debtor rejects a car rent, they surrender the car to the rent party and have no far personal liability. If the debtor wants to assume the lease, they can keep the place if they make the rent payments. If the debtor subsequently defaults in rent payments, the rent company can take back the car .
assumption of an executory abridge is not the same as a reassertion of the lease, so the lease company may not sue the debtor for the proportion of payments due under the lease following default .
Florida bankruptcy means test

Student Loans

student loans are not dischargeable in chapter 7 bankruptcy unless the debtor can demonstrate that lend payments impose “ undue hardship. ” To eliminate a scholar lend under the “ undue asperity exception, ” the debtor must file a separate motion with the bankruptcy woo and appear before the bankruptcy evaluator with tell of adversity. As a practical count, it is unmanageable for bankruptcy debtors to demonstrate undue asperity unless they are physically unable to work .
Most bankruptcy courts use the Brunner test in determining asperity. Under this test, to discharge student loans in bankruptcy, the debtor must show :

  1. That the debtor cannot maintain, based on current income and expenses, a ‘minimal’ standard of living if forced to repay the loans.
  2. Additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans.
  3. That the debtor has made good faith efforts to repay the loans.

Bankruptcy Discharge

The bankruptcy discharge is the legal work that wipes out a debtor ’ randomness legal liability to pay unbarred creditors. Creditors of debts that have been discharged in bankruptcy can never again try to collect debts the debtor had incurred anterior to filing bankruptcy. A debtor may sue a creditor for damages and sanctions if the creditor attempts to collect a debt after the debtor ’ mho bankruptcy discharge has been entered.

How Long Does It Take to Rebuild Credit After Chapter 7 Bankruptcy?

For most people, it will take anywhere from 1 to 2 years to build back credit. After that timeframe, most people can get a newfangled loanword, such as a home plate lend mortgage. Credit card applications will come even earlier .
Gideon Alper

About the Author

Gideon Alper specializes in bankruptcy for individuals and their families .
Book a consultation with Gideon.

About the Author

Gideon Alper specializes in bankruptcy for individuals and their families .
Book a consultation with Gideon.

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Category : Finance

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