Federal bankruptcy law recognizes that bad things sometimes happen to good people, and that consumers sometimes simply do not have the ability to comply with the demands for payment from creditors. In many cases, there are circumstances beyond the consumer’s control which can only be addressed through the cancellation or modification of debt through a filing for bankruptcy relief, and that is what Congress intended when it first implemented federal laws providing for debt relief for individuals and business owners.
If you are a resident of Florida during the two years prior to filing for bankruptcy, the property you are allowed to keep is determined by Florida statutory law. In most instances, while discharging all of your unsecured debt, you will be allowed to keep your homestead (while maintaining your mortgage payments); you may be allowed to keep your retirement accounts and pensions; you may be allowed to keep your automobiles (while maintaining your monthly payments); and you will be allowed to keep other exempt asserts as allowed by Florida law.
We can determine before you file, which specific exemptions may apply to your particular situation.
Chapter 7 Bankruptcy
A Chapter 7 proceeding is often the most efficient way for a debtor, or married debtors, to regain control of their financial situation. A Chapter 7 bankruptcy proceeding is most helpful for an individual or married couple with significant unsecured debt, such as:
- Credit cards
- Medical bills
- Previous repossessions
- Past due accounts
- Deficiencies from foreclosures
A Chapter 7 filing is a liquidation bankruptcy proceeding in which an eligible debtor is generally discharged from all unsecured debt. In order to determine if you are eligible for Chapter 7 relief, we examine your income and your assets. In certain situations, you, as the debtor, may have more assets than the law exempts for you. That does not prevent you from obtaining bankruptcy relief. In those cases, you may choose to forfeit certain assets for liquidation, or “buy back” certain non-exempt equity/assets from the bankruptcy estate. We will assist you through each step of the process to ensure that you obtain the maximum amount of debt relief for which you are eligible. Most often, it may be the entirety of all of your unsecured debt.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a debt reorganization or debt repayment type of bankruptcy proceeding. It allows the debtor to consolidate many of their debts into one reduced monthly payment. A Chapter 13 proceeding often allows debtors to save their homes from foreclosure. The delinquent mortgage payments may be “caught up” over a 60-month period, or a debtor may ask to participate in the bankruptcy mortgage mediation program which takes place according to an Order entered by the bankruptcy Judge. In a Chapter 13 proceeding, a second or third mortgage, or home equity line, that is no longer secured by any value in the property may actually be “stripped or eliminated” as an unsecured debt, as with a Chapter 7 liquidation proceeding. Other secured debts, like car payments, additionally may be “re-amortized” over the life of the repayment plan at a then existing and reduced market interest rate. In certain instances, if you have owned a vehicle more than 910 days, we may be able to “cram down” the payment to what the vehicle is worth, instead of what you owe. “Priority debt” such as delinquent taxes or child support arrearages may also be paid under the provisions of a Chapter 13 repayment plan.
There are many factors that determine whether or not you will have to pay any portion toward your unsecured debt in a Chapter 13 proceeding. If you are required to pay any portion toward your unsecured debt, it is often a small fraction of what you owe.
A Chapter 13 plan payment is most often much less than the total of the separate payments you are presently required to make to each creditor.
Our assistance in filing a petition for bankruptcy relief on your behalf invokes an immediate automatic stay, which acts as a legal injunction against any further collection efforts against you by your creditors. Immediately upon the date of the filing of the petition for bankruptcy relief (either through a Chapter 7 or Chapter 13 Petition) the automatic stay prevents and legally prohibits (as of the date of filing) any further:
- Creditor phone calls
- Collection letters
- Wage garnishments Lawsuits
- Bank levies
- All other forms of harassment, intimidation and scare tactics by creditors
Once a bankruptcy case is successfully completed, the debtor/consumer receives a discharge from the bankruptcy court. The discharge releases the debtor/consumer from the legal liability of any of the debts included in the bankruptcy. Creditors are left with no legal cause to contact you or pursue the collection of debts listed in your bankruptcy filing. For those debts that are not dischargeable (i.e.: student loans, certain tax liabilities, child support payments), a repayment plan may sometimes be established.
For an initial consultation regarding your potential bankruptcy filing, or your alternatives to an bankruptcy filing, call our office for an appointment.
Stephen Clinton Willis
Attorney at Law