Chapter 7 Bankruptcy in Florida|Process Explained

The basic idea in a Chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for you giving up your non-exempt property to be sold, with the money distributed to your creditors. In most cases, all of your property will be exempt.

If you want to keep property like your home or car and are behind on mortgage or car payments, Chapter 7 will probably not be the right choice for you since it does not eliminate the right of mortgage holders or creditors to take your property.

If your income is above the median family income in your state, you may have to file a Chapter 13 case. The national median family income for a family of four in 2010 was about $66,876,00. If your income is higher than this, you must fill out “means test” form with detailed information about your income and expenses. Based on this information, if you have enough income left over that could be paid to unsecured creditors, the bankruptcy court may decide that you cannot file a Chapter 7 case unless there are special extenuating circumstances.

A Chapter 7 bankruptcy will cancel most if not all of your debts but you may have to let the bankruptcy court or trustee's office sell some of your property for the benefit of your creditors. However, most people do not have a lot of non exempt property and can therefore keep all of their property and still receive the benefits of the bankruptcy discharge. We will perform an analysis on the property that you have and any property that you wish to keep and explain to you if this property would be exposed by filing a bankruptcy.

Even if you otherwise qualified, a bankruptcy court may dismiss your case if it thinks you've tried to cheat your creditors or conceal assets. Red flags typically occur when you transfer assets to friends or relatives, run up debts immediately before filing, concealing property or money and generally being untruthful or deceptive in any filing with the court.

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