Using Bankruptcy Exemptions To Protect Property
When you file a Chapter 7 or a Chapter 13 case, your property becomes a part of your bankruptcy estate. However, this does not mean that you will lose any of your property. Congress provided federal bankruptcy exemptions within the Bankruptcy Code so that debtors could protect certain property from creditors and the court. By using bankruptcy exemptions, you can prevent your property from being sold by a Chapter 7 trustee. You can also reduce the amount you must pay to unsecured creditors in a Chapter 13 repayment plan by exempting the equity in your property.
However, you must claim the exemptions in your bankruptcy filing for them to apply. Claiming the exemptions requires you to list each of the exemptions you claim with the corresponding property on Schedule C of your bankruptcy forms. An amendment may correct improperly scheduled exemptions or omissions that were mistakes. Nevertheless, if the trustee believes the debtor was committing fraud by attempting to hide property, he could object to the amended exemptions. Therefore, it is extremely important to work with an experienced Daytona bankruptcy lawyer who understands how to use bankruptcy exemptions to provide the greatest protection of property afforded by law.
Finding Pro Bono Attorneys
It’s common in the legal profession for attorneys to provide a certain amount of free services to low-income individuals. And many bankruptcy attorneys cut fees drastically for clients who qualify for a bankruptcy fee waiver.
To find a local pro bono attorney, consult with different lawyers in your area or contact your county or state bar. Or visit the American Bankruptcy Institute’s Bankruptcy Resources webpage.
What Must I Do Before Filing Bankruptcy
You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed. The Benenati Law Firm P.A. will coordinate this class for you. It can be done over the internet or telephone and takes approximately 60 to 90 minutes.
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If Im Filing From Home While Do I Need A Bankruptcy Attorney
The process of filing from home is convenient and removes some of the burdens of filing for bankruptcy. But it doesnt change the process entirely. It just means youre handling meetings and exchange of paperwork remotely. Youll still need to submit correct and complete information. You have all of the same obligations and responsibilities youd have if you were filing for bankruptcy in person. An attorney helps you through the process, ensures everything you submit to the court is correct and complete, and is there to answer your questions every step of the way.
If youd like to know more about filing for bankruptcy from home or you are ready to get started, give us a call!
Who Can File Bankruptcy
Every individual and corporation in the United States has access to the bankruptcy court. Chapter 7 bankruptcy is available to individuals that pass a two-part means test. This test looks at your income in relation to the size of your family and the total debts that you owe.
Chapter 11 bankruptcy is typically used by companies in Florida to restructure their debt. Individuals in Florida may be eligible to file for Chapter 11 in Florida if their secured and unsecured debts exceed the limits set forth for a Chapter 13 filing, and they wish to reorganize their debts instead of liquidating them in a Chapter 7 filing.
Chapter 13 bankruptcy is available to established Florida residents that have a level of regular income that will allow them to make payments towards their debts. Their total unsecured debt must be lower than $383,175. Their total secured debt must be lower than $1,149,525.
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Florida Bankruptcy Means Test
The Florida bankruptcy means test is an income test used to determine who qualifies for Chapter 7 and who should be in a Chapter 13 bankruptcy instead. If your household income exceeds the income limits, youâll have to complete the full means test calculation to find out if youâre eligible for Chapter 7 bankruptcy in Florida.
Median Income Levels for Florida
Florida Median Income Standards for Means Test for Cases Filed On or After May 1,2021
Am I Eligible For Bankruptcy In Florida
If you meet Florida’s two-year residency requirement you must also pass a means test to file for Chapter 7. There are two means tests usually used to find whether you can file for Chapter 7. Under the first test, if your household income is less than the median for one of the same size in the state, you qualify. According to U.S. Census data, the median income for a three-person Florida family was $70,815 as of November 2020.
When your income is above the state’s median, you may qualify under a second test based on disposable income. You will project your monthly disposable income over the next five years by taking your monthly gross income and multiplying it by 60, then subtracting allowable expenses.
- If your projected disposable income over the next five years is less than $7,025, you can file under Chapter 7 in Florida.
- If your projected disposable income is more than $11,725, then you cannot file under that chapter.
- If your projected disposable income falls between $7,025 and $11,725, you will qualify the disposable income amount is less than 25% of your unsecured debt.
To file for bankruptcy under Chapter 13 you cannot have unsecured debts of more than $419,275. Your total secured debts cannot total more than $1,257,850
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Choosing The Right Bankruptcy Chapter For You In Florida
Most people file either Chapter 7 or Chapter 13. If you don’t know the differences between the two, you’re not alone. The short explanation below and our handy Chapter 7 versus 13 chart will help clear things up.
Chapter 7 bankruptcy.Chapter 7 is often a bankruptcy filer’s first choice for several reasons. It’s quickit only takes a few months to complete. And it’s cheapyou don’t pay anything to creditors. It works well for those of us whose property consists of the essential items needed to live and work.
People with more assets could lose them, however, especially if they own unnecessary luxury items. For instance, you might have to give up your RV, baseball card collection, or timeshare in the Bahamaseven your house or vehicle if you have too much equity in it or you’re behind on the payments. Unlike Chapter 13, Chapter 7 doesn’t have a payment plan option for catching up on late mortgage or car payments. So you could lose your home or car if you’re behind when you file.
Caution for businesspeople. Be sure to learn about the ins and outs of small business bankruptcies. The principles discussed apply to consumers only.
Collect Your Jacksonville Bankruptcy Documents
Before formally filing bankruptcy in Jacksonville, youâll need to fill out a substantial amount of paperwork required by the Court. To accurately provide the Court with the information it requests in this paperwork, youâll need to gather together some personal financial documents. After all, you canât accurately give the Court an accounting of your current income without referencing your recent pay stubs. Similarly, you may benefit from requesting a free copy of your so that you can easily make an accurate list of your debts and creditors. If you own a car, you may need to track down your title so that you can provide the Court with specific information about this asset. The more personal documentation you can gather about your finances before you begin completing your paperwork, the easier itâll be for you to submit the forms required for filing Chapter 7 bankruptcy in Jacksonville.
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What Are The Other Types Of Bankruptcy In Florida
Aside from Chapter 7, Chapter 11, and Chapter 13, another type of bankruptcy chapter available in Florida is Chapter 12. Chapter 12 is a form of bankruptcy designed for family farmers and family fishermen. This type of bankruptcy allows debtors to restructure by having a payment plan rather than liquidating their assets.
What Property Can I Keep
In a chapter 7 case, you can keep all property which the law says is exempt from the claims of creditors. Florida has liberal bankruptcy exemptions, including an unlimited homestead exemption which means in almost every instance, your home is protected.
In determining if personal property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth when your bankruptcy case is filed. Especially for furniture and cars, this may be a great deal less than what you paid or what it would cost to buy a replacement.
The value of the contents of your house will be discussed at your petition signing appointment after you hire us. It is based on the honor system. Unless you are a high profile public figure, most likely no one will be going to your house to determine the value of your belongings but it does happen occasionally especially if the trustee assigned does not trust or know your attorney. This is yet, another reason you NEED to hire an experienced attorney for filing your bankruptcy.
We will also look at the equity in your property. That means you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a car that is worth $25,000 but you still own $15,000 to the bank for the car, you have only $10,000 in equity. That is where our attorneys will counsel you how we can protect the majority of the $10,000 in remaining equity.
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Documents Needed For Chapter 7 And Chapter 13
You will need access to information to complete the bankruptcy paperwork. Additionally, the bankruptcy trustee will require documents to verify your petition was correct. Therefore, prior to filing bankruptcy, you should compile the following information:
- A list of all your creditors, the nature of the debt, the amount owed to each, and their mailing addresses.
- Your source of income, how often you are paid, and how much you are paid. Additionally, the same income information will be required for your spouse. Your spouseâs information is needed even if your spouse is not filing bankruptcy with you. This is necessary for the court, the trustee, and your creditors to determine your household financial situation.
- A list of all your property .
- A detailed list of your monthly living expenses, such as food, shelter, clothing, transportation, taxes, medicine, etc. These expenses must be reasonable and necessary for family maintenance.
The Meeting Of Creditors
The next step in the Chapter 7 process is to attend a 341 Meeting of Creditors. This is a meeting that your trustee will schedule, and the borrowers attendance is mandatory. See bankruptcy law 11 U.S.C. § 341. The meetings are tools for the Trustee to inquire about your creditors and ask borrowers questions. The borrower will be under oath and must answer the trustees questions truthfully.
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Dealing With Your Car
If you have a car, the first important thing you need to do is make sure to list it on your bankruptcy forms. Even if you donât drive the car everyday, and you donât consider the car âyour car,â as long as your name is on the title, you need to list it on your bankruptcy forms.
Whether or not youâre going to be able to keep your car when filing bankruptcy in Florida depends on a few factors, including how much your car is worth and what exemptions you choose to apply.
In Florida, some bankruptcy trustees do not permit the Kelly Blue Book valuation and, instead, require a valuation from the National Automobile Dealers Association. After you list your car on your forms, you have a few options on how to deal with your car loan. Youâll have to choose between reaffirming your car loan, or either redeeming or surrendering your car.
Chapter 7 Bankruptcy In The State Of Florida
Chapter 7 is by far the most common form of bankruptcy for individuals in local cities like Stuart, Fort Pierce, Port St. Lucie, et cetera, and the attorneys at Treasure Coast Legal have filed hundreds of Chapter 7 bankruptcies on behalf of our clients. In order to qualify for Chapter 7, you will be required to pass a means test, which compares your monthly income to the median monthly income of your geographic area. If you qualify, your non-exempt assets will be liquidated, and the proceeds will be used to pay off your creditors. Once you emerge from Chapter 7usually over the course of several monthsyou are free of all dischargeable debt. Chapter 7 is often referred to as a “fresh start” bankruptcy for this reason. Although property, including residential real estate, is often sold in Chapter 7 bankruptcy, depending on the amount of equity in your home, you may be able to retain your primary residence. Our bankruptcy team is able to determine whether or this is a likely outcome during our initial consultation.
Debt That Cannot Be Discharged In Florida
Certain debts are ineligible for discharge under the Chapter 7 bankruptcy process, including:
- Federal or Federally backed student loans, except in cases of undue hardship
- Alimony and child support payments
- Debts incurred through fraud
- Debt that has been listed on a previous bankruptcy filing
- Debts owed after causing personal injury or death while DWI
Filing Bankruptcy While Living Overseas
The bottom line is that if you do find yourself in another country and have left behind excessive debt in the US, in some cases, you wont even qualify for Chapter 7 if you dont have American assets. However, that doesnt mean that you should leave your debts unattended or that youll stay abroad forever. Even if you intend to remain in the country in which youre currently living, burning bridges is never a good way to go. If you can work out a way to face your debt head-on or file bankruptcy without completely defaulting on sums you owe, its better in the long run.
While its unlikely that creditors will follow you to another country to try and file suit in that countrys court system to regain lost monies, there are other consequences that can haunt you later. The best thing you can do is talk to a qualified American attorney whos dealt with international bankruptcy filings before, whether its in-person or a phone consultation. Only then can you make an informed decision.
Learn more about the zero down bankruptcy and to start your journey toward a better,
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How The Homestead Exemption Works In Florida Chapter 7 Bankruptcy
The Florida Constitution exempts a Florida homestead of unlimited value 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 even after being sued. These homestead rules apply in state court collection proceedings. Bankruptcy law does not affect Floridas unlimited homestead exemption in state court proceedings.
But bankruptcy law is a federal law, and federal law may supersede state law in certain cases. The Florida homestead exemption is applied differently in a Chapter 7 bankruptcy than in Florida state court.
There are some value ceilings and purchase deadlines applicable to Floridas homestead exemption in Chapter 7 bankruptcy. Under federal bankruptcy law, the debtors Florida homestead is exempt up to a value of approximately $160,000 unless the debtor occupied his current Florida homestead property and previous 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. These numbers increase from time to time, so debtors should get the current limits from their bankruptcy attorney. Chapter 7 bankruptcy debtors are entitled to an unlimited homestead exemption if they have occupied their Florida homestead for more than 40 months prior to filing.
Are There Benefits To Filing Bankruptcy With My Spouse
Exempt property is the property that you do not have to forfeit when filing for Chapter 7 bankruptcy. A joint filing may entitle the couple to double the amount of some exemptions. For instance, the Florida exemption for a motor vehicle is only $1,000 in an individual bankruptcy case. However, when filing jointly, the exemption doubles to $2,000. Additionally, the personal property exemption of $1,000 increases to $2,000 when filed jointly. See In Re Hawkins. It is important to note the remaining exemptions will remain the same and not increase by filing a joint petition. Therefore, a couple may be able to claim more exemptions by filing separate, individual petitions for bankruptcy.
The number of exemptions you are eligible for may significantly impact whether or not to file jointly. Depending on the circumstances of your case, all of your property may be exempt from the bankruptcy. On the other hand, you may be forced to liquidate precious assets if you file for Chapter 7 bankruptcy, and your property does not qualify for an exemption.
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How Much Does It Cost To File Bankruptcy In Florida
Our office charges legal fees of $2,000 for a basic and typical Chapter 7 bankruptcy of a debtor who is under median income and not required to complete a means test analysis. Like all other attorneys, we charge somewhat more for higher-income debtors where preparation of the means test is required.
We charge more for debtors with complicated issues that may result in challenges from creditors or bankruptcy trustees.
Most Chapter 7 consumer bankruptcies are relatively standardized, and legal fees are low compared to other legal work. In 2011, one of the Orlando bankruptcy judges issued a Memorandum Opinion which discussed the market for Chapter 7 bankruptcy attorney fees in central Florida. The court stated that the average cost of hiring an attorney to file a Chapter 7 bankruptcy in central Florida ranges between $1,500 and $2,500 plus filing fees and other costs. Attorneys charging fees within this typical range, the court noted, meet with their clients as necessary. Still, they rely on paralegals to complete necessary pleadings, maintain client contact, and follow up on details involved in a bankruptcy case.