Jacksonville Chapter 7 Bankruptcy Attorney
Chapter 7 bankruptcy is one of two types of bankruptcies individuals can file in Florida. This type of bankruptcy is most appropriate for people who are struggling with a significant amount of debt that they do not think they will be able to repay due to their financial situation. Making the decision to file Chapter 7 bankruptcy should not be taken lightly. It is critical that you understand the financial and legal obligations that come with it. Below, our Jacksonville Chapter 7 bankruptcy attorney explains more.
What is Chapter 7 Bankruptcy?
Through a Chapter 7 bankruptcy you can discharge, or eliminate, all or most of your debt. It is important to know that certain types of debt cannot be discharged during bankruptcy. The debt is not erased or forgiven and so, it will still remain on a person’s credit report after the process is complete. The borrower is simply no longer legally responsible to repay it.
A bankruptcy trustee may sell some of a borrower’s property during a Chapter 7 bankruptcy. The proceeds from the sales are then distributed among the borrower’s creditors to help repay the debt. This is why Chapter 7 is also known as a liquidation bankruptcy. Still, Florida law outlines many exemptions, including up to 100 percent of a borrower’s equity in their home, that can protect certain assets. Often, people who file Chapter 7 do not lose any property at all.
The Means Test
The majority of people who file Chapter 7 bankruptcy must pass the means test. The means test compares a person’s debt with their income to determine if they have the means to repay the debt. People who do not pass the means test must file another type of bankruptcy, which is usually Chapter 13.
If your income is lower than the median income level in Florida, you do not have to pass the means test. You are also exempt if you are a disabled veteran or if your debts are not mainly consumer debt. For example, if you incurred a great deal of medical debt, you are not required to pass the means test.
Debt You Cannot Discharge in Chapter 7
A Chapter 7 bankruptcy can discharge a significant amount of debt. However, there are some types of debt you cannot discharge during the process. These include:
- Child support and alimony payments
- Federal student loans, unless there is a case of undue hardship
- Credit card purchases or loans of $1,150 or more incurred within the 60 days before filing
- Debts incurred due to fraud
- Criminal fines
- The majority of tax debt
- Debt that was included in a previous bankruptcy filing
Our Chapter 7 Bankruptcy Attorney in Jacksonville Can Advise On Your Case
The Chapter 7 bankruptcy process is a complicated one and there are many factors to consider. At Ronald Cutler, our Jacksonville Chapter 7 bankruptcy attorney will ensure nothing is overlooked in your case and help you through the process so you can get relief from your debt. Call us now at 386-490-9949 or contact us online to schedule a free consultation.