The Pros & Cons of Filing Individual Chapter 7 Bankruptcy in Florida

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Filing bankruptcy in any situation can be difficult. Even though bankruptcy can help to relieve most of the debt that you may have accrued over the years, that doesn’t mean it’s without its consequences. Before deciding whether or not bankruptcy, specifically Chapter 7 bankruptcy, is the right option for you, you should discuss your options with an accredited bankruptcy attorney in Fort Myers. Contact us today, to set up a free consultation with a bankruptcy attorney at Miller, Hollander & Jeda. We will help you make the right decision in order for you to gain financial wellness, even if that means choosing an alternate route other than bankruptcy to find debt relief.

With this in mind, below you’ll find basic information about Chapter 7 bankruptcy in Florida for individuals as well as, both the advantages and disadvantages of filing Chapter 7 bankruptcy.

What is Chapter 7 Bankruptcy?Chapter 7 bankruptcy

Chapter 7 bankruptcy is one of the most common forms of bankruptcy across the United States. When you file Chapter 7 bankruptcy or liquidation bankruptcy for individuals, you are given the chance to wipe the slate clean and become debt free by discharging your debts. The main advantage of this form of bankruptcy is that once the process is over you are free from future obligations to your discharged debts. Unlike Chapter 13 bankruptcy, in Chapter 7 bankruptcy the debtor is not obligated to pay back debts. Instead, the debtor may be expected to sell their property and/or assets in order to “pay off” debt that is owed.

Who is Eligible for Chapter 7 Bankruptcy?

Any business, corporation or individual is eligible to apply for Chapter 7 bankruptcy. However, being able to file Chapter 7 bankruptcy in Florida means you must qualify by your income and/or pass the means test. Even if your income is too high to meet the eligibility requirements of Florida, contact a Fort Myers bankruptcy attorney before deciding Chapter 7 is out of the question. You may still be eligible if you’re able to pass the means test. The means test records your income, expenses, financial records, in addition to your secured and unsecured debt. If you do not qualify, one of our attorneys may direct you to file another type of bankruptcy (Chapter 11 or Chapter 13) or discuss alternative debt relief strategies.

How Long Does Chapter 7 Bankruptcy Take?

Generally speaking, the entire process of filing for Chapter 7 bankruptcy in Florida will take anywhere from three to six months.

What Are The Advantages of Filing Chapter 7 Bankruptcy?

  • Chapter 7 Bankruptcy discharges most debts. Common forms of debt such as debt from medical bills, personal loans, credit card debt, utilities, and even cellphone debt can be discharged when you file for Chapter 7 bankruptcy using a bankruptcy attorney in Fort Myers. Debt such as student loans, criminal penalty fines and fees, government judgments (child support and/or alimony payments), and specific tax obligations cannot be erased through any type of bankruptcy.
  • When you file bankruptcy you are granted an automatic stay. Once you decide to file bankruptcy, the moment in which your Fort Myers bankruptcy attorney files your petition with the bankruptcy court, an “automatic stay” is put into place. An automatic stay means that all collection efforts to collect any outstanding debt you owe by collection agencies must cease. This includes phone calls, emails, letters, lawsuits, eviction and in some cases can even prevent foreclosures. This elimination of debt harassment is both an emotional and financial advantage.
  • Your credit score may improve. Contrary to popular belief, filing for bankruptcy can actually improve your credit score if you have a low score. Conversely, not filing for bankruptcy and being sued for a debt you owe can decrease your credit score. According to this article from Nerd Wallet, people have seen as much of a 40 point increase on their credit score within just the first six months after filing bankruptcy.
  • You may get to keep most of your property. Many states, like Florida, have exemptions that allow you to keep most of your property, even assets and property that you may not necessarily need. In addition to these exemption laws, you will be able to keep all of the property and money you earn after you have filed Chapter 7 bankruptcy. In order to better understand what is considered exempt in Florida, contact Miller, Hollander, & Jeda for bankruptcy counsel.
  • Bankruptcy can be a fresh start. Filing for bankruptcy properly and with the help of a bankruptcy attorney in Fort Myers can help you get back on your financial feet and stay there. After the process is over, you can start rebuilding your credit while creating and sticking to a budget in order to attain your future financial goals.

What Are The Disadvantages of Filing Chapter 7 Bankruptcy?man upset over bills

In some cases filing bankruptcy isn’t always the best option. An example of when bankruptcy is not a good option for you is if most or all of your debt is in the form of student loans. As mentioned above some types of debt cannot be erased. If student loans or tax obligations are the largest forms of your debt you may want to look into other avenues of debt relief. Some other disadvantages that stem from filing Chapter 7 bankruptcy in Florida include:

    • You may lose some property. Unfortunately, when you file Chapter 7 bankruptcy, the trustee who is assigned to your bankruptcy case may find that some of your assets are non-exempt and use this property to help liquidate your debt in order to pay off your outstanding debts.
    • If you have good credit, it will go down. If when you file bankruptcy your credit was in good standing, filing will decrease your credit score and can stay on your credit report for as long as ten years.
  • Bankruptcy will not get rid of all of your debt. Chapter 7 bankruptcy will not get rid of debt from student loans, some tax obligations, child support, alimony, or criminal fees.

If you are facing financial instability and are not sure where to turn, your best chance for choosing the best debt relief option for your situation is to speak with a Fort Myers bankruptcy attorney as soon as you are able. The quicker you can start designing a plan to get you on the road to financial wellness the better. Contact Miller, Hollander & Jeda today to schedule a free, no-obligation consultation.