In the U.S., you are eligible for Chapter 7 bankruptcy if you have no other means of paying off your debts. Chapter 7 bankruptcy is also known as liquidation because it works by liquidating – selling off – any of your non-exempt assets.
Chapter 7 offers the best chance to obtain a fresh financial start, and with Florida’s bankruptcy exemptions, most applicants don’t lose any of their possessions. If you are considering bankruptcy, and want to keep your car, home, and pension, Chapter 7 bankruptcy might be right for you.
Eligibility for Chapter 7
You must fulfill specific criteria to be eligible for Chapter 7 bankruptcy. The court determines your eligibility through a means test. If, after examining your complete finances, it’s determined that you earn less than Florida’s median income, which is currently around $55,000, the court will allow you to file under Chapter 7.
However, even if you earn more than this, you may still be eligible for Chapter 7 bankruptcy. There are certain common obligations you can deduct from your income that may reduce it to below the median income. These include:
- Taxes – As you have to pay taxes, you can deduct these from your income.
- Involuntary Deductions – These are deductions like union dues or uniforms that your work requires, and you cannot opt-out of.
- Insurance – Florida deems health, disability, and term of life insurance as necessary payments.
- Secured Debts – These are debts where the creditor has the right to reclaim the collateral with which you secured the debt. The court works out the amount these are worth by averaging your monthly payments over the rest of the loan.
Additional Benefits of Chapter 7 Bankruptcy
The burden of debt comes with an incredible amount of stress. With Chapter 7 bankruptcy, you don’t have to live in constant fear of the consequences of that burden.
Often, the two biggest problems debt brings is the threat of losing your home and harassment from creditors looking for repayment. Chapter 7 bankruptcy immediately stops the home foreclosure process, evictions, and repossessions.
Even better, under Florida’s bankruptcy exemptions, it’s not uncommon to be able to keep your home. Aside from your primary residence, state exemptions include equity of up to $1,000 in your car and $4,000 in personal property.
Debts can also incur wage garnishment, which is when your employer automatically pays your creditors from your wage. Again, Chapter 7 Bankruptcy will stop this from happening, ensuring you receive all the salary you work for.
Get Help from a Qualified Tampa Bankruptcy Attorney
Foreclosures can be complex, and choosing the right type is essential to achieving the results you want. At DJS Law Group, our team can guide you every step of the way and ensure you keep as many of your assets as possible.
If you’re ready to take the first step towards financial security, get in touch with our team today for a free no-obligation consultation. Fill out our contact form or call us at 888-266-1078.