Florida, it’s the land of sun, sandy beaches, and tall cold drinks. Families vacation here, while many couples plan their retirements near or around the crashing ocean waves. Vacations go out the window, and retirement dreams are dashed when creditors start calling and bills accumulate. Before you drown in debt and say goodbye to your dreams, a Chapter 7 bankruptcy may resolve your credit and debt issues, making your Florida dream a reality.
A Chapter 7 Bankruptcy in Florida Opens Doors
Residents who are looking for relief from their debts can find it by filing Chapter 7. Known as a liquid or “straight” bankruptcy, Chapter 7 allows individuals and families to discharge most or all of their debts. Typically a Chapter 7 bankruptcy lasts about six months. The process is short, and if you supply your attorney with all the right financial information, then your bankruptcy could be a relatively easy process.
What You Need to Qualify for Bankruptcy, Chapter 7 in Florida
While you may think that if you are suffering duress from creditor harassment, garnishments, or other financial problems you will immediately qualify for bankruptcy. However, Congress passed a set of laws called the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005 that requires individuals to meet certain requirements before filing for a Chapter 7. The first requirement involves the state median income, and the second requires a more detailed inspection on an individual’s finances called a mean’s test.
Florida Median Income Level
In order to file bankruptcy, families must fall at or below the average income level for the state they reside. Additionally, individuals must be residents of the state they reside in for approximately one year in order to qualify for bankruptcy. For those wishing to file, the list below shows current median income level data:
- 1 person – $40,022
- 2 people – $50,130
- 3 people – $54,594
- 4 people – $65,135
- More than 4 people: Debtors must add $7,500 per family member to the income level for family’s over 4 members.
As inflation and other economic factors change, so too does the median income level. Please check with your bankruptcy attorney to find the most accurate data on the median income level for Florida.
The Means Test
If you exceed the income level for your family size you still may qualify for bankruptcy. The means test is a mathematical process where that determines a debtor’s worthiness for bankruptcy. Even if you make more than the average income level, you may have more debts than you can reasonably handle. A means test, which will be given by your bankruptcy attorney, will help you discover if you can file for bankruptcy, Chapter 7 without an automatic dismissal.
Some individuals cannot qualify for a Chapter 7. In this instance, a Chapter 13, also known as debt reorganization may work for your financial status.
The Process of Filing Chapter 7
After you have discussed your financial situation with your bankruptcy attorney, the next step is to provide him with the right financial documents to prepare your petition. A 40-60 page document, the petition outlines your financial information to the bankruptcy court, making it easy for the judge and trustee (representative of creditors) to understand your financial picture. Therefore, you will need to supply your bankruptcy lawyer with some basic financial information. Most Florida bankruptcy attorneys will ask you for the following:
- The last six months of your paystubs (including your spouse’s)
- Last year’s filed tax return
- A complete list of your creditors (including secured loans from a house or vehicle)
Your attorney may ask for more information based on the complexity of your bankruptcy case.
You Can Keep Property and Assets When Filing a Chapter 7 Bankruptcy in Florida
Many Floridians think that once you file for a Chapter 7 bankruptcy, you will lose everything. As the Reform Act of 2005 outlines, families are able to keep many of their assets, including a home and a vehicle. Those who file Chapter 7 are restricted to the Florida state laws, there is no choice to use federal exemption laws, as the case might be in other states. Property exemptions in Florida include:
- Home exemption: Your home along with 160 acres of farm land is 100% from a bankruptcy.
- Wages: Floridians are allowed to keep 100% of all wages made not including taxes (limit is at $750 per week).
- Personal Property: including burial grounds, furniture, appliances, clothing, and other personal items up to $4,000 in value is exempt.
- Vehicle: Debtors may keep one vehicle valued at $1,000 or less.
- Benefits: 100% of the following benefits are all exempt from bankruptcy
- Government employees deferred compensation benefits
- Public employees’ retirement benefits for all:
- Police officials
- State and county employees
- Old age assistance
- Worker’s compensation
- Fraternal Benefit Society
- FEMA benefits
- Federal civil service disability
- Insurance: 100% of the following types of insurance are exempt from a Chapter bankruptcy in Florida
- Disability insurance
- Veterans Administration insurance benefits
- Railroad unemployment insurance
- Retired public employees health insurance subsidies
Additionally 100% of a federal tax refund is exempt along with college or medical savings accounts. More exemptions may be available to you depending on your financial need. These exemptions can change from year to year, so it is essential to ask your attorney for the most current information.
Get back out in the Florida sun, and enjoy your life with your family. Don’t let your credit card debt keep you from being the person you were meant to be. Call a local Florida bankruptcy attorney today to see if you qualify for Chapter 7 bankruptcy. Florida Bankruptcy Courts
Winston E. Arrow Federal Building
100 North Palafox Street, Room 154
Pensacola, Florida 32502
Phone: (866) 639-4615
Florida Northern Bankruptcy Court
United States Courthouse
110 East Park Avenue, Suite 100
Tallahassee, Florida 32301
Phone: (850) 521-5001
Florida Middle Bankruptcy Court
Sam M. Gibbons United States Courthouse
801 Norht Florida Avenue, Room 555
Tampa, Florida 33602
Phone: (813) 301-5046
Bryan Simpson United States Courthouse
300 North Hogan Street, Room 3-350
Jacksonville, Florida 32202-4204
Phone: (904) 301-6490
Orlando, Florida Bankruptcy Court
135 West Central Boulevard, Room 950
Orlando, Florida 32801
Phone: (407) 648-6365
Florida Southern Bankruptcy Court
Claude Pepper Federal Building
51 Southwest First Avenue, Room 141
Miami, Florida 33130
Phone: (305) 714-1800
Fort Lauderdale, Florida Bankruptcy Court
299 East Broward Boulevard, Room 112
Fort Lauderdale, Florida 33301
Phone: (954) 769-5700
The Glagler Waterview Building
1515 North Flagler Drive, 8th Floor
West Palm Beach, Florida 33401
Phone: (561) 514-4100