Bankruptcy Attorney

Bankruptcy: The Basics

If you’re unable to pay your debts, bankruptcy is one option to hit reset on your finances. With the right lawyer, the process is simple, and it’s more common than most people expect. In the US, over 50,000 new bankruptcy cases are filed every day, or more accurately, one every half a second. If you’re considering filing for bankruptcy, here’s a brief overview to help you understand your options.

Bankruptcy Types

There are two primary “chapters,” or bankruptcy types, available to consumers: Chapter 7 and Chapter 13. The most significant difference between the two is that Chapter 13 bankruptcy involves making partial payments to your creditors, while Chapter 7 does not.

In the Middle District of Florida, of 26,148 bankruptcy cases filed in 2019, 27% were Chapter 13 proceedings and 72% Chapter 7.

The Legal Language

To better understand what bankruptcy is, you need to know a bit of legal terminology.

  • Debtor – The person filing for bankruptcy
  • Assets – Another term for property
  • Creditor – The person or company the debtor owes
  • Foreclosure – The forced sale of a property
  • Secured Debt – Debt backed by collateral
  • Unsecured Debt – Debt not backed by collateral

Qualifying for Bankruptcy

Many factors go into determining whether you qualify for bankruptcy, and if so, what type is right for you. One thing to bear in mind is that under Chapter 7 and 13 bankruptcies, there is no minimum amount of debt required. However, there is a maximum under Chapter 13.

Additionally, there are income limits to qualify for Chapter 7, determined through a means test. This test examines your income, expenses, and secured and unsecured debt. If you have too many assets or your income is too high, then the courts may decide that you must file under Chapter 13.

Bankruptcy Exemptions

Filing in Tampa Bay puts you under Florida’s bankruptcy laws, and the exemptions it allows are some of the most generous in the country.

If you owe less on your home than it is worth, the state allows you to keep your permanent residency, with a few caveats. The property must be in your possession for more than 1,215 days before you file and comprise less than half an acre in a municipality or 160 acres outside of one.

Florida also allows various exemptions for personal property. You may retain $1,000 in protected personal assets, which rises to $4,000 if you don’t own any real estate. You may also have $1,000 in equity on your vehicle, which doubles if you are married and filing for joint bankruptcy.

Foreclosure Defense

One of the main advantages of filing for either Chapter 7 or Chapter 13 bankruptcy is that it stops foreclosure on your primary residence. However, it’s important to note that the financial institution that holds your mortgage can file a petition with the Florida Courts of Equity to restart the payments.

Get a Fresh Financial Start

Florida bankruptcy law is complex—but our qualified lawyers will take care of everything. If you’re looking to get a fresh financial start, schedule a free consultation today. Call the Law Offices of Dennis J. Szafran at 888-266-1078.

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