A Guide to Personal Bankruptcy Under Chapter 7 (Part One)
There are any number of reasons you can end up considering bankruptcy under Chapter 7. Now, you need to understand what it really is. First, you should understand that bankruptcy can mean a new beginning. The stress of dodging phone calls from creditors and the anxiety of checking the mail can come to an end. Second, you should understand what Chapter 7 bankruptcy in Florida is and what it is not.
Are You Eligible for Chapter 7 Bankruptcy?
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes pre-bankruptcy credit counseling mandatory within the 180 days preceding the filing of bankruptcy. This can usually be accomplished in 60 to 90 minutes with an accredited debt councilor. It is usually around $50, but it can be free of cost if you tell the councilor you cannot afford to pay.
This Act also implemented the means test. If you use the calculation and your remaining income is less than $100, you are generally eligible to file for bankruptcy under Chapter 7.
What is Chapter 7 Personal Bankruptcy?
The defining characteristic of Chapter 7 bankruptcy is the liquidation of assets. A trustee will be assigned to collect all non-exempt assets and sell them. The proceeds of the sales will be distributed to creditors. Non-exempt assets (can be taken and sold) include (but are not limited to):
- Collectibles such as sports memorabilia, stamps, coins, etc.
- Family heirlooms.
- Any cash or investments you may have.
- A second car.
- A second home.
Assets considered exempt (generally not taken and sold) are:
- Motor vehicles.
- Necessary clothing, household items, furnishings and appliances.
- Jewelry (up to a defined value).
- Public benefits such as welfare, social security, unemployment, etc.
- Damages awarded for injury.
Check back for Part Two as we cover what assets may be considered exempt specifically in Florida and more topics related to bankruptcy under Chapter 7.
If you have read enough and you are considering filing for bankruptcy under Chapter 7, consider Dsouza and Strachan Lawgroup Group. With more than 15 years guiding people through some of the most difficult times in their lives, Dsouza and Strachan Lawgroup group is prepared to get you the fresh start you deserve.