Bankruptcy - FAQ 

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SOME GENERAL INFORMATION ABOUT BANKRUPTCY

Bankruptcy offers a fresh start by discharging most kinds of debts. Below are some general concepts related to bankruptcy. However, exceptions apply to almost every area and while the information below is intended to be generally accurate, it is no substitute for legal advice applied to your specific situation.

TYPES OF BANKRUPTCY

There are three main types of bankruptcy cases. Chapter 7, 13, and 11. For most consumers, Chapter 7 is the most advantageous but debtors must qualify. In a Chapter 7 if you owe more than the total value of your non-exempt assets then you can benefit.

Chapter 7:

In a Chapter 7 the debtor's non-exempt assets are liquidated (converted to cash). Once the debtor's eligible assets are sold, the proceeds go to the creditors and to pay the costs of administering the bankruptcy. Whatever debts are remaining are discharged, with limited exception.

Exemptions:

In Florida, you can keep your homestead and some personal property, the amount depending on if you file single or married. Also, you may be able to keep your car. Other assets may be abandoned by the court because it isn't worth the cost of selling them.

Chapter 7 Bankruptcy eliminates your UNSECURED debt, with limited exception. SECURED debts like your home or car will still be subject to the mortgages, improvement loans, and financing that helped you buy them, and you must keep your payments current. Some property can be redeemed and bought back at the current the market rate, even if it's less than what you owe. Also, judgments that grant a lien on your property for bills that you didn't pay might be able to be avoided.

WHAT YOU CAN'T AVOID

You can't avoid telling the truth, being honest about what your assets are, or your debts on assets that you transfer just prior to bankruptcy in order to avoid creditors.

You also can't avoid debts like child support, alimony, some federal income taxes, employer withholding taxes, student loans (usually), and debts obtained without ever intending to repay them (like running up your credit card bill just before filing).

YOUR CREDIT RATING?

The maximum time a bankruptcy can show on your report is 10 years.

HOW MUCH DOES IT COST?

The filing fee is $299. Attorney's fees are usually between $1,200-$2500. Also credit counseling costs around $60 and you may need to pay for a credit report.

WHAT DO I NEED TO GET STARTED?

You will need to pay the filing fee and attorney's fee prior to filing and fill out our detailed questionnaire.

Links: Bankruptcy,  Debtors Rights