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Bankruptcy FAQ

Have a question about bankruptcy?

If you are considering filing for bankruptcy one of the best things you can do is to speak with a professional that can review your financial situation and give well founded advice on whether it is the best choice for you are not. This is a big decision and there are many questions that can arise. The following page provides answers to some of the most common ones. Further information can be gained by calling my firm to schedule a free initial consultation where you can meet with me in person and go over your case.

Frequently Asked Bankruptcy Questions

Who can file for bankruptcy?

There are different forms of bankruptcy so anyone can file for it, but that is not a guarantee they will be awarded it. It will depend greatly on the type they are seeking. Laws have been strengthened to help discourage individuals from filing when they don't have significant enough debt. It really is meant to be for those in more serious need. Chapter 7 is harder to file under and there are guidelines that regulate who is able to pursue this route. For those that are ineligible, Chapter 13 is a great option that can offer necessary assistance when debts only seem to continue escalating.

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 and Chapter 13 are two common forms of bankruptcy that carry a number of important differences. Chapter 7 is the more traditional form of liquidation bankruptcy. It is for those with serious debt and an income below the average in their area. In order to file for this form of bankruptcy, a means test will first need to be passed. Through this type, the assets of the individual will be liquidated and used to pay towards owed expenses.

This is considered the "fresh start" bankruptcy, whereas Chapter 13 is for those that may have a regular income but they need assistance with tackling their debt. Owed amounts can be combined together and a monthly payment made on the amount for up to a five year period. This is a payment plan rather than a liquidation of assets and disposable income will be put towards it until creditors are paid. In general, those that are able to pay their debts with help should file under Chapter 13, whereas those that do not have the financial income to tackle it may require filing under Chapter 7.

Will all my debt be gone after filing?

It will depend on the type of bankruptcy that is filed about. Bankruptcy is not a guarantee that all debt will be gone and there are certain ones that will not be covered such as student loans or owed taxes. For the most partm, filing will allow relief from owed financial amounts but it is critical to be informed as much as possible up front so that you are not caught off guard when you are left responsible for a debt you expected to be covered.

Will I lose everything if I file?

This is a case by case situation. It applies more to those that are filing under Chapter 7. Through this type of bankruptcy the assets of the debtor are liquidated and applied to their owed balance. This includes a number of personal items and can mean that a large majority of your possessions are taken. There are exemptions however, and many people are actually able to keep far more than they expected. Exemptions may include a homestead, personal property up to $1,000 motor vehicle equity of $1,000, up to $4,000 in personal property for those eligible for the wildcard exemption and more. Speak with a Clearwater bankruptcy lawyer to learn more about which ones will apply to you.

What is the means test?

This test was established to help deal with the problem of overuse of bankruptcy and to determine who in fact needs it. A means test is not necessary for all forms of bankruptcy, but must be passed prior to filing for Chapter 7. Through the test the income of a person is compared to the median in the area. Those with an income above the average will be ineligible to file. For those that do pass the test they will be able to file and may have their debts discharged.

Will filing stop creditors from harassing me?

The Fair Debt Collection Practices Act was added in 1978. In it are a number of guidelines including limitations on the practices that debt collectors can use when attempting to gain payment. One of the benefits that debtors gain through this act is the restriction that is placed on debt collectors to refrain from continuing contact one bankruptcy is filed for. If there is contact to take place it must be with the legal representation of the debtor.

Are there other options besides bankruptcy?

Yes there are other options that are available for those in debt. Bankruptcy is not for everyone and some people may find other choices more suited for their needs. For many individuals however, bankruptcy is just what they need and provides the answer they have been looking for.

What is the new wildcard exemption?

This is an addition that came recently in which $4,0000 worth of personal property is allowed as an additional exemption for those that do not claim their homestead as an exemption. This exemption is covered under Florida Statutes §222.25(4). The exemption is available to non-homeowners, as well as homeowners that are out of the residence prior to filing. This is a decision that was ruled upon by the Supreme Court.

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Address: The Mercury Insurance Building, 1901 Ulmerton Road, Suite 435, Clearwater, FL 33762 Phone: (727) 424-2279