Articles Posted in Chapter 7

Wood blocks spelling small business and a cup of coffeeThere are more than 2.4 million small businesses in Florida, employing more than 3.2 million people. If you are one of them, you might be wondering if bankruptcy is an option to reduce your debt. Depending on how your business is legally categorized, you’ll be able to file a Chapter 7, 11, or 13 case. An experienced bankruptcy attorney in Jacksonville can help you determine if bankruptcy is your best alternative. Because Florida is a homestead exemption state, there may be some other things to keep in mind as well. Each of these can have different effects on your business.

What Types of Bankruptcy Can I File?

In the US, there are a few different types of bankruptcy filing categories, called “Chapters.” Chapters 7 and 13 are usually used by individuals for personal filing. Chapter 11 is used for businesses. These can all mean different things for a small business in Florida.

chapter 7 bankruptcy vs chapter 13 bankruptcyFiling for bankruptcy can be a powerful tool for debt consolidation and relief. It can help you get out from under the financial burden weighing you down. If you’re considering filing for bankruptcy, you may be wondering whether you should file Chapter 7 bankruptcy or file Chapter 13 bankruptcy. The right choice depends on your current income, assets, debts, and your future financial goals.

What are the Major Differences Between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy can be a relatively quick way to wipe out general, unsecured debt like medical bills and credit cards, and it requires no repayment. It is designed for people with little to no disposable income available to pay back debt. Although it wipes out most debts, it doesn’t clear particular types of debt such as taxes, student loans, or unpaid child support and alimony. When you file Chapter 7 bankruptcy, your nonexempt property is sold to pay back your creditors. The “means test” will help determine if you’re eligible to file Chapter 7 bankruptcy. If you make more than the median income of your state and have some disposable income to pay off debt you may be forced to file Chapter 13 instead.

Emergency Room SignFar too many Americans find themselves in a financial crisis because of soaring medical costs. All it takes is one trip to the emergency room or a bad diagnosis for things to spiral out of control. But there are options. Will your medical debt be eliminated if you declare bankruptcy? Learn more about filing bankruptcy and what it means when it comes to medical debt.

Is Declaring Bankruptcy to Discharge Medical Debt an Option?

Sadly, nearly 1.7 million American households have experienced bankruptcy due to mounting medical expenses. This type of debt creates major stress and has become a fairly common reason to declare bankruptcy.

A computer with bankruptcy and debt counseling website openBefore filing bankruptcy in Jacksonville, you’re required to complete credit counseling. The Federal Trade Commission states that you must complete this credit counseling from a government approved agency within 180 days of filing. You must also complete a debtor education course after filing in order for your debts to be discharged.

Why is Credit Counseling Required?

The main purpose of credit counseling is to help you evaluate your financial situation and ensure that bankruptcy is a last resort. Through counseling, you’ll determine if there’s a feasible way to handle your debts outside of bankruptcy without increasing what you owe.

a gavel on a bankruptcy court benchMany people worry about what happens after they make the decision to file for bankruptcy. While preparing your paperwork is half the battle, it’s important to be prepared for what occurs after you’ve signed your petition. Here’s what you can expect after filing bankruptcy.

The Automatic Stay is Put in Place.

An automatic stay is a federal court order that goes into effect the moment a bankruptcy case is filed. It prevents creditors from making any effort to collect on debts you owe. You’ll be assigned a case number by the court, which you should give to any creditors that try contacting you. If they persist, they will have to answer to the bankruptcy court.

a pile of credit cards including visa and mastercardThe primary reason people file for bankruptcy is to get rid of their debt and have a fresh start. But while many of your debts will be discharged in bankruptcy, some debts may remain after filing. Read on to learn more about how to reduce debt by filing for bankruptcy.

Which Debts are Not Discharged with Chapter 7

When you file Chapter 7 bankruptcy, many of your debt will be discharged. There are some debts, however, that will not be wiped out. Some of these debts may be subject to denial or successfully objected by the creditor. Others are never dischargeable, meaning that they fall under a predetermined list of non-dischargeable debts. These include:

one woman whispering a shocking secret to anotherMany people are concerned with the negative stigma that surrounds bankruptcy. They want to know who will find out if they decide to file. While a bankruptcy is publicly recorded, typically only creditors or bankruptcy attorneys will actually view this information. You probably shouldn’t worry too much about your friends, neighbors, or others in your social circles finding out.

What’s Included in My Bankruptcy Record?

The information on file will include copies of any documents related to the filing. Values of assets, creditors’ claims and information on any funds exchanged in the process will be listed. It will also include notes about meetings and phone calls.

two people attempting to file for bankruptcy on a laptopBankruptcy is the federal court procedure offering a person or business the opportunity to eliminate or restructure their debts. Debts that can’t be paid may be forgiven, and creditors may get some amount of repayment depending on the filer’s ability to pay. Filing bankruptcy in Florida can be a difficult decision, but it provides the opportunity to start with a clean slate.

What is The Bankruptcy Process in Florida

Most of the bankruptcy process is governed by federal bankruptcy laws. This means that filing bankruptcy in Florida is much like filing in other states. There is some Florida-specific information that you’ll need to submit. There are also Florida exemptions to be aware of. The basic process of filing in Florida follows these steps.

a married couple linking arms while sitting
If you and your spouse are contemplating filing for bankruptcy, you may wonder if you are required to file jointly. Married couples can, in fact, file separately. When filing for bankruptcy in Jacksonville, married couples have the following options when choosing to file for Chapter 7 or Chapter 13:

  • One spouse files individually
  • Both spouses file individually

a calculator and pencil on graph paperFalling on hard times financially can also lead to falling behind on your taxes. When your tax debt becomes extremely delinquent, the IRS may issue a garnishment on your wages. This garnishment, or levy, allows the IRS to take part of your wages each pay period. A garnishment will continue until you: A. make other arrangements to pay off your tax debt; B. your debt has been paid in full; or C. the levy has been released. Overwhelmed by the thought of losing your wages, you may wonder if filing for bankruptcy will relieve you from an IRS garnishment.

Filing for bankruptcy can in fact offer some relief from the stress of an IRS garnishment. Once you file bankruptcy, a court ordered automatic stay will immediately go into effect. This stay will stop any type of debt collection, including garnishments and seizures, for the duration of the bankruptcy case. However, since bankruptcy will not get rid of most tax debts, how your garnishment is affected after the case is over will depend on which type of bankruptcy is filed: Chapter 7 or Chapter 13.

In a Chapter 7 bankruptcy filing, all of your dischargeable debts will be wiped out. Since most tax debts are not dischargeable, they will remain. The IRS garnishment will, however, be temporarily halted due to the automatic stay while your bankruptcy case is processed. When your case is over, you will still owe on your tax debt. For this reason, while Chapter 7 can offer a window of relief, it does not offer a long-term solution to the situation.

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