by Shawn Hungate.
Here are some very basic concepts about Bankruptcy. Please understand that every case is unique and these statements may not necessarily apply to your unique case. But if you are considering filing a bankruptcy, some questions you may have are:
Do I qualify for a Bankruptcy?
What does a Bankruptcy do for me?
How long does a Bankruptcy take?
Do I need an attorney to file a bankruptcy?
1. DO I QUALIFY FOR A BANKRUPTCY?
Well, it depends on what chapter you are filing. A chapter 7 bankruptcy (consumer) is generally for individuals who earn under $40,766.00 per year. This number can change every year. This allowed amount also goes up depending on family size. A married couple can earn up to $49,729.00, a 3 person family can earn up to $52,840.00, and a four person family can earn up to $62,742.00. These amounts are simply the easiest way to qualify for a chapter 7 bankruptcy, as you do not have to pass what the Bankruptcy Court calls a “means test”.
NOTE: These values can and do change!
For incomes higher than these, you would either have to pass the “means test” or consider filing a chapter 13 bankruptcy. Other chapters do not generally apply to individuals or families, such as chapter 11 bankruptcies. There are also Chapter 7 bankruptcies specifically designed for businesses.
Additionally, if you have recently filed a bankruptcy, you may not qualify to file another one for several years. Feel free to call me for any questions about this at 407-846-1529 (407-846-1LAW).
2. WHAT DOES A BANKRUPTCY DO FOR ME?
The goal of a chapter 7 consumer bankruptcy is to give a family or individual a fresh start. It discharges all allowed debt and will liquidate all unprotected assets.
The debts allowed to be discharged, for the most part, are credit card debt, medical bills, and other unsecured debt. It can also discharge certain secured debt (mortgages, car loans, etc.) if you do not wish to keep the security (the home, the car, etc.). It cannot usually discharge certain debts like student loans, taxes, or debt on secured property you wish to keep.
The assets that you can protect are generally: Your homestead (if you wish to reaffirm the mortgage, or own your home without a mortgage), your personal property up to $1000.00 in value for an individual or $2000.00 for a married couple, equity in a vehicle (again $1000.00 for an individual or $2,000.00 for a married couple), most retirement plans, and certain other exempt assets. Additionally, in Florida, you are allowed a $4,000.00 “wildcard” exemption if you do not use your homestead exemption. These exemptions do not necessarily mean you will lose the assets that are unprotected, but you would have to “buy” the assets back from the trustee if they are not exempt.
A bankruptcy can also often stop pending lawsuits and eliminate judgments. Once filed, it also stops harassing telephone calls from creditors.
If you want to stop harassing telephone calls from creditors, please give me a call at 407-846-1529 (407-846-1LAW).
3. HOW LONG DOES A BANKRUPTCY TAKE?
There are several steps in a bankruptcy, beginning with the initial filing of the Petition and related schedules. The time frame for filing depends on the complexity of your individual case. If you have few creditors, it can be done rather quickly, but with many creditors, the preparation of the petition can take several months, with a lot of communication between my office and you, the client.
After the Petition is filed, it will generally take about a month or two to get to your meeting of creditors. Once that is done, and if there are no objections or filings by the creditors to challenge the bankruptcy, it takes a minimum of 90 days before a discharge can be granted. The case is closed soon thereafter.
Even if this seems to take a long time, understand that it is important to carefully prepare the filing of a bankruptcy in order to avoid problems that can result in you having to appear in front of a Federal Judge. A rushed bankruptcy is not something anyone should try. Additionally, many of the benefits of the bankruptcy are realized upon filing (such as creditors generally stop calling), instead of at the end of the case.
The time can vary from file to file, but I will always respond promptly to your questions and issues. Give me a call at 407-846-1529 (407-846-1LAW) if you have any questions.
4. DO I NEED AN ATTORNEY TO FILE A BANKRUPTCY?
Technically, no, you do not. But I would NEVER recommend someone file a bankruptcy without an attorney. Filing a Bankruptcy is extremely detailed and complicated. Only an attorney can correctly evaluate your case and file a petition while giving you advice on every step. Additionally, an attorney can attend your meeting of creditors with you. If you do see an attorney about filing a bankruptcy, ask if they will personally attend the meeting with you, or if they hire someone else to cover the hearing for them. I always personally attend all meetings with my clients.
Also, the chances of messing something up increases greatly without the aid of an attorney. If you do make a mistake when filing a bankruptcy, you may end up with your case dismissed or even investigated by the FBI. You really should strongly consider hiring an attorney to help you through this complex and detailed legal procedure.
If you have any questions, please feel free to contact me. You can schedule a free initial consultation by calling me: