Chapter 7 bankruptcy was created as a way for people with lower incomes to free themselves from unsecured debt such as credit cards, personal loans, and medical bills. To qualify for Chapter 7, you must pass a “means” test that documents all your sources of income. If your household income in the six months immediately prior to applying for bankruptcy is less than the average income of households the same size in Florida, you automatically qualify. The process is very straightforward and does not take long to complete.
When a bankruptcy petition is filed, your assets and debts are itemized. You will be allowed certain exempt property. Any non-exempt property may be liquidated (sold) to help satisfy your debts to the greatest extent possible. In Florida, the bankruptcy process can usually be completed in about six months.
There are several types of debt that often cannot be discharged as part of the process. Common types of this debt include:
Unpaid family support
Student loan debt
Criminal penalties and restitution
Civil sanctions
Individual creditors can also petition the court to collect all or a portion of the money owed to them, but this is not common.
If you are feeling overwhelmed by debt, contact me to set up a free initial consultation and find out if Chapter 7 bankruptcy is right for you. Call or fill out my online contact form. I am here to help.