Florida Bankruptcy Law E-Book · Step 4: Meeting With Creditors Within 10 days of filing for bankruptcy you should receive a notice setting the date for the meeting of creditors

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Florida Bankruptcy Law E-Book

Simple Guide to

Florida Bankruptcy Lawby:

florida Law Advisers, P.A.

PREPARING FOR BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

THE BANKRUPTCY PROCESS

THE ROLE OF THE U.S. TRUSTEE

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ELIMINATING DEBT THROUGH BANKRUPTCY . . . . . . . . . . . . . 11

DISCHARGE OF DEBT

ELIMINATING TAX DEBT THROUGH BANKRUPTCY

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11STOPPING CREDITOR HARASSMENT

ENDING WAGE GARNISHMENTS

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PROTECTING YOUR PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

LIFE AFTER BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ALTERNATIVES TO BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

IMPORTANT DISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

EXEMPT PROPERTY

PREVENTING A HOME FORECLOSURE THROUGH BANKRUPTCY

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14REAFFIRMATION OF DEBT

HOW DIVORCE CAN AFFECT YOUR BANKRUPTCY

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THE DIFFERENT TYPES OF BANKRUPTCY . . . . . . . . . . . . . . . . . . . . 7

CHAPTER 13 BANKRUPTCY

CHAPTER 7 BANKRUPTCY

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How Chapter 7 & Chapter 13 Differ

Converting a Chapter 7 to Chapter 13 Bankruptcy

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CHAPTER 11 BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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Table Of Contents


If you are considering filing for bankruptcy, you should consult a bankruptcy lawyer as soon as possible. Without competent legal advice you may be unaware of bankruptcy laws that prohibit you from making specified purchases or payments to creditors prior to filing for bankruptcy. Certain payments to creditors or purchases of goods and services prior to filing for bankruptcy can allow a court to deny your right to discharge debt. If a debt is not discharged in bankruptcy, you wil

Florida law advisers, P.A. is dedicated to helping our clients have a successful, responsible bankruptcy and obtain a fresh financial start. In order to get the most out of your bankruptcy, it is important that you contact us to speak with a bankruptcy attorney as soon as possible. By getting help early in the process, we can provide a comprehensive plan for your bankruptcy and help you avoid unwanted consequences.

Under U.S. bankruptcy law, a person filing for bankruptcy may not act with the intent to hinder, delay, or defraud a creditor. In addition, bankruptcy law prohibits petitioners from transferring, removing or concealing property from the bankruptcy court. If the court finds that this type of evasion was intentional on your part based on your actions, you may be denied a discharge or even have your bankruptcy petition denied in its entirety. Examples of this include:

• Transferring property to friends or family in an attempt to prevent a house, car or other asset from being liquidated by the bankruptcy trustee • Purchasing luxury items within 90 days of filing for bankruptcy • Paying debts owed to friends and family in preference of money owed to other creditors • Withholding financial records from the bankruptcy court

If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A. may be able to help. Our bankruptcy attorneys have years of experience helping people just like you solve their financial problems and obtain a fresh start. We combine our experience and skills in the courtroom with a thorough knowledge of the law to help achieve the results our clients need and deserve. When you hire Florida Law Advisers, P.A. you don’t just get legal advice, you get experienced attorneys by your side every step of the way.

Florida Law Advisers, is a customer-service oriented firm with a strong reputation for providing personalized attention and dedicated legal counsel. Regardless of whether you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will be able to provide you with competent legal advice you can trust.

Preparing For Bankruptcy


Step 1: Initial Consultation With a Bankruptcy Attorney

The Bankruptcy Process

The initial consultation is a two-way exchange of information between you and an experienced bankruptcy lawyer at our firm. You have the opportunity to explain your current situation to us and discuss what you hope to gain by filing for bankruptcy. In return, we will explain how the bankruptcy process works and propose comprehensive, personalized solutions to solve your financial troubles. We will fully explain each possible legal option available to you, including the advantages and drawbacks that may occur with each proposed course of action. At the end of the consultation, you should have a firm understanding of all of your options and be confident in deciding which course of action is best for your needs. Whether you decide to file for Chapter 7, 13, 11, pursue negotiations with your creditors, or do nothing and weather the storm, you will never be charged for the initial consultation and everything you discussed with us will remain confidential.

Step 2: Credit Counseling

Current bankruptcy law requires debtors to complete two credit counseling sessions, one before filing for bankruptcy and another session after submitting the petition for bankruptcy. The credit counseling sessions are conducted by nonprofit credit counseling agencies that have been approved by the U.S. bankruptcy trustee. Florida Law Advisers will provide you with a list of approved counselors in your area for each counseling session. The credit counseling should last for about an hour and can be done either in person, over the phone or online. A bankruptcy attorney at our firm will guide you through the credit counseling process and be available to answer all your questions.

Step 3: Filing the Bankruptcy Petition

After we have completed all the necessary documents, petitions, and schedules we file them with the bankruptcy court. Our bankruptcy attorneys will expedite the process by electronically filing the documents with the bankruptcy court. Your bankruptcy officially begins as soon as the petition is electronically filed and you are assigned a case number by the court. At this point, the court will implement an automatic stay. The automatic stay requires all collection actions against you to stop immediately. Creditors and collection agencies will not be able to contact you, garnish your wages, or repossess your property while the automatic stay is in effect. The automatic stay will even put a stop to a scheduled foreclosure sale of your home. In most cases, the automatic stay will remain in effect until your bankruptcy case is discharged.

Step 4: Meeting With Creditors

Within 10 days of filing for bankruptcy you should receive a notice setting the date for the meeting of creditors. It is called meeting of creditors; however, in most cases the creditors will not attend and the trustee will be the only party asking questions. At the meeting you will answer questions under oath regarding your income, expenses, assets, and debts. It is usually a very short meeting, lasting only about 5 minutes. The bankruptcy trustee will be in charge of the meeting, and the bankruptcy judge assigned to your case will not be permitted to attend. You do have the right to have an attorney at your side during the meeting and you should take full advantage of this right to ensure you are not asked any improper questions.



Step 5: The Discharge of Debt

The discharge of debt releases the debtor from all personal liability to the debt. The discharge is a permanent court order prohibiting creditors from taking any collection action on debts that have been discharged in the bankruptcy. For those filing under Chapter 7, the discharge is usually granted 60 days after the meeting of creditors has taken place. For those filing under Chapter 13, the discharge is typically granted after all payments under the Chapter 13 plan have been submitted to the trustee.

Step 6: Emerging From Bankruptcy

We know that the bankruptcy process can be very intimidating. Fortunately, you do not have to go through these steps alone. Our team of skilled and experienced bankruptcy attorneys will be by your side every step of the way. Florida Law Advisers, P.A., is dedicated to providing effective representation, individual attention, and affordable fees to our bankruptcy clients. All of our initial consultations are free and convenient payment plans are always available. Florida Law Advisers, is a customer-service oriented firm with a strong reputation for providing personalized attention and dedicated legal counsel. Regardless if you need help with Chapter 13, Chapter 7, or other debt relief, our professional legal team will provide you with competent legal advice you can trust.

Role of the Trustee in Chapter 7 Bankruptcy:

The primary objective of a trustee in Chapter 7 bankruptcy is to maximize the value of the estate for the benefit of the creditors. The trustee will review all documents filed with the court to ensure they are accurate and complete. The trustee also has a duty to investigate your financial affairs and discover any funds that can be used to pay creditors.

The trustee will also manage the sale of a borrower’s nonexempt assets. The trustee will aggressively try to locate and sell a borrower’s nonexempt assets to benefit the creditors in the bankruptcy. However, the trustee will not pursue every nonexempt asset a borrower owns. The trustee must consider the costs of locating and selling the asset. If the cost to obtain and liquidate the asset is greater than the benefit to the estate the trustee has a duty to not pursue the asset.

Role of the Trustee in Chapter 13 Bankruptcy:

Chapter 13 and Chapter 7 are different forms of bankruptcy; and therefore, the role of the trustee will also be different. In Chapter 13, the trustee does not liquidate any assets since Chapter 13 is a debt restructuring, not a liquidation form of bankruptcy. In Chapter 13 cases, the trustee reviews the Chapter 13 payment plan to ensure it is reasonable and disburses the funds paid under the plan to the appropriate creditors.

The Role of the U.S. Bankruptcy TrusteeWhen you file for Chapter 7 or Chapter 13 bankruptcy, the court will appoint a trustee to oversee your case. The Office of the U.S. Trustee is an agency within the Department of Justice and is responsible for monitoring the administration of a bankruptcy case. The trustee assigned to your case has a duty to be impartial and disinterested. Therefore, the trustee and everyone that the trustee employs must not have any interest in the outcome of the bankruptcy. Furthermore, The National Association of Bankruptcy Trustee’s Canon of Ethics requires a trustee to treat all parties in the bankruptcy with dignity and respect.

Chapter 13 Bankruptcy

The Different Types Of Bankruptcy

If you are experiencing financial hardship because the income you receive is not enough to pay your monthly bills, you should consider filing for Chapter 13 bankruptcy. Chapter 13 is a form of bankruptcy in which a consumer consolidates their existing debts into one monthly bill that is paid to a bankruptcy trustee. Unlike Chapter 7 bankruptcy, borrowers will not be required to sell their assets as a condition of the bankruptcy. Chapter 13 can provide the financial relief you need and give you a fresh start without the risk of a bankruptcy court ordering you to sell any of your valuable property.

When a borrower files for Chapter 13 they will be required to comply with a court supervised payment plan. The payment plan outlines how a borrower’s disposable income will be used to pay the debts included in the bankruptcy. Disposable income is calculated by deducting a borrower’s expenses and cost of living from the income they receive. The payment plan will usually require the borrower to pay all of their disposable income for the next 3 to 5 years toward the debts included in the bankruptcy. If the borrower complies with the terms of the bankruptcy any balance still due on credit cards and other unsecured debt at the end of the bankruptcy will be discharged.

Chapter 13 is especially beneficial to borrowers who are facing foreclosure and do not want to lose their home or other assets. When a Chapter 13 bankruptcy is filed it will immediately stop all foreclosure and other debt collection activities. Chapter 13 can even allow you to get your driver’s license reinstated if it has been suspended due to unpaid parking tickets.

To be eligible for Chapter 13 bankruptcy you must meet the rigid requirements proscribed under bankruptcy law. To qualify for Chapter 13, your unsecured debts must be less than $360,475 and your secured debts must be less than $1,081,400. Secured debts are loans that have collateral, such as a car loans and mortgages. In addition, your payment plan must provide that your creditors receive as much as they would have if you filed for Chapter 7, instead of Chapter 13 bankruptcy. Determining eligibility for Chapter 13 can be complex and requires a thorough understanding of bankruptcy law. To see if you qualify for Chapter 13 bankruptcy contact us to speak with a bankruptcy lawyer at our firm.


Chapter 7 bankruptcy is also known as a liquidation bankruptcy because the debtor (borrower) may be ordered by a bankruptcy court to sell certain assets. Fortunately, not all of a debtor’s assets will be subjected to liquidation by the bankruptcy court. Florida bankruptcy law provides exemptions for many of the assets a debtor might own. If an asset is exempt from the bankruptcy the borrower will not be required to sell the asset.

In a Chapter 7 bankruptcy, the court will discharge many types of debts including: credit cards, hospital bills, leases, and other unsecured debts The discharge releases the borrower from all liability on the debt. Filing for chapter 7 will also put an immediate stop to any other pending litigation or collection action, such as home foreclosure, wage garnishments, and vehicle repossessions.


In 2005, congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act which made substantial changes to our national bankruptcy system. Included in the act is the requirement that Chapter 7 applicants pass the Means Test. The purpose of the Means Test is to reserve Chapter 7 bankruptcy protection for individuals who truly need it. The Means Test requires that applicants earn an income below a specified amount in order to be eligible for Chapter 7 bankruptcy.

Step 1:

The first part of the Means Test is a straight-forward comparison of incomes. If your average income over the most recent 6 months is lower than the state median income for a household of the same size as yours, you automatically pass the Means Test. If your income is above the state’s median income you will need to continue with the Means Test to determine your eligibility for Chapter 7 bankruptcy.

Step 2:

The second step of the Means Test requires you to calculate your monthly disposable income. Monthly disposable income is determined by your gross monthly income minus allowable expenses. Next, you must project your disposable monthly income for the next five years by multiplying the monthly disposable income you calculated earlier by 60.

• If your projected disposable income for the next five years is less than $7,025, you will pass the Means Test.

• If your projected disposable income for the next five years is greater than $11,725, you will not satisfy the Means Test.

• If the projected disposable income for the next five years is between $7,025 and $11,725 you will pass the Means Test and be eligible for Chapter 7 bankruptcy, so long as that disposable income is less than 25% of your outstanding unsecured debt.

In most cases, the higher the amount of disposable income, the less likely it is to pass the Means Test. However, even if you fail the Means Test, you may still qualify for Chapter 7 if you can show you have special circumstances that warrant you filing for Chapter 7.

If you are ineligible for Chapter 7, you may still have many other forms of debt relief available. For instance, you may want to explore filing for Chapter 13, Chapter 11, or negotiating with your creditors.

How Chapter 7 & 13 Differ

Both Chapter 7 & 13 are designed to provide debt relief for borrowers seeking help from overwhelming debt. However, there are many key differences between a Chapter 7 and Chapter 13 bankruptcy. It is important that you speak with a bankruptcy attorney before you decide which type of bankruptcy to file. Each form of bankruptcy will have its own unique benefits and disadvantages. An experienced bankruptcy lawyer can explain each form of bankruptcy and help you decide which chapter would be best for your specific situation.


Chapter 7 Bankruptcy:

In many cases Chapter 7 bankruptcy is more beneficial to borrowers than Chapter 13 bankruptcy. Chapter 7 is a liquidation bankruptcy, which means a debtor (borrower) may be required to sell certain assets during the bankruptcy. Not all assets will be subject to liquidation due to certain Florida bankruptcy law exemptions. If an asset is exempt the debtor will be able to retain ownership and not be ordered by the court to liquidate the asset.

In some cases, a borrower may not even have to liquidate a single asset because of the Florida exemption laws. The type of property you own and the exemption laws will play a significant role in determining whether Chapter 7 or Chapter 13 is the better choice for your case. If your assets are not exempt, you may be better off filing for Chapter 13 where you will not be required to liquidate any assets.


If your assets are not exempt under Florida bankruptcy law you may want to file for Chapter 13,instead of Chapter 7 to avoid liquidating your property.Chapter 13 is a restructuring bankruptcy, instead of selling assets to pay creditors you create a payment plan to pay back the amount owed. The amount that will have to be paid back to the creditors is largely based on the disposable income you receive each month.

Disposable income is calculated by deducting your monthly expenses and cost of living from the income you receive each month. The payment plan will usually require a borrower to pay all of their disposable income for the next 3 to 5 years toward the debts included in the bankruptcy. If the borrower complies with the terms of the bankruptcy any balance still due on credit cards and other unsecured debt at the end of the bankruptcy will be discharged.

Unlike Chapter 7 bankruptcy, Chapter 13 debtors will not have to pass the Means Test to be eligible. The Means Test requires a borrower’s monthly income after specified deductions to be below the Florida adjusted median income. In Chapter 13 cases the Means Test is not required; however, a borrowers secured debts must be less than $1,081,400 and their unsecured debts must be less than $360,475.

Converting Your Chapter 13 Into a Chapter 7 Bankruptcy

In some circumstances, a borrower may need to convert their Chapter 13 bankruptcy into a Chapter 7 bankruptcy. For example, this may occur when a borrower in Chapter 13 is unable to make the payments required under the Chapter 13 payment plan. If that were to occur, converting to Chapter 7 may the best option.

Voluntary Conversion:

Under bankruptcy law, you have the right to convert a Chapter 13 bankruptcy into a Chapter 7 if you satisfy the Chapter 7 eligibility requirements. For instance, you will have to prove that you pass the Means Test before the court approves your conversion. The Means Test requires applicants to earn income below the specified amount in order to be eligible for Chapter 7 bankruptcy. Determining eligibility for Chapter 7 can be complex and confusing without competent legal representation. If you are considering filing for Chapter 7 or converting your Chapter 13 bankruptcy contact us to schedule a free consultation with a bankruptcy attorney at our firm. During the consultation a bankruptcy lawyer will answer your questions and develop a comprehensive plan to help alleviate your financial troubles.


Forced Conversion:

Not all conversions are voluntary; a bankruptcy court can legally force you to convert your Chapter 13 bankruptcy into a Chapter 7. However, in order to force a conversion the bankruptcy trustee will need to show there are legal grounds to force the conversion. Legal grounds for a forced conversion include:

• Failure to submit required Chapter 13 payments on time • Unreasonable delay caused by the borrower that poses harm to creditors • Failure to file a Chapter 13 payment plan by the specified time • Loss of employment

The instances above are just a few reasons why a borrower may be required to convert a Chapter 13 bankruptcy to a Chapter 7, there are many other circumstances which may warrant a court to force the conversion. If you are at risk of being forced to convert your Chapter 13 bankruptcy to a Chapter 7 you should seek the advice of an experienced bankruptcy attorney.



Chapter 11 bankruptcy is often referred to as business reorganization because it provides businesses with the opportunity to restructure its debt and modify existing contracts. When filing for Chapter 11 bankruptcy, a company negotiates with its creditors and stakeholders to develop a Chapter 11 plan. The Chapter 11 plan allows businesses to alter existing contracts and loan arrangements to reduce the amount owed and extend the repayment period. Reorganization provides a company under financial stress with the opportunity for a fresh start. However, filing for Chapter 11 bankruptcy can be a very complex process that requires skilled legal representation. If you are considering filing for Chapter 11, you should contact us to speak with a bankruptcy lawyer before taking any action.

Chapter 11 is not just reserved for businesses. Individuals may also be eligible to file for Chapter 11 bankruptcy, however, in most cases Chapter 7 or Chapter 13 bankruptcy will be a better solution for individuals. Both Chapter 7 and Chapter 13 are less expensive and time consuming than Chapter 11 bankruptcy. Business are eligible to file for Chapter 7 bankruptcy, but are not permitted to file for Chapter 13. Therefore, if a company wants to restructure rather than liquidate its assets, it should file for Chapter 11 instead of Chapter 7, which is a liquidation bankruptcy.

Eliminating Debt Through Bankruptcy

Discharge of Debt

If a debt is discharged in bankruptcy the borrower will be released from all liability on the debt. The discharge is a permanent court order releasing the borrower from the responsibility of having to pay the debt and prohibits the creditor from taking any collection action against the borrower. In most cases, obtaining a discharge will be the primary reason why a borrower files for bankruptcy. The discharge of debt is available in both Chapter 7 and Chapter 13 bankruptcy. However, not all debts are eligible for a discharge.

In order for a debt to be eligible for discharge in bankruptcy, the debt must have been originated prior to the bankruptcy filing date. In addition, the debt must be listed on the bankruptcy petition. If it is not included the debt will not be eligible for a discharge even if it was originated prior to the bankruptcy filing. However, certain debts will always be ineligible for a discharge, regardless if the debt originated prior to the bankruptcy filing or not. Examples of debts ineligible for a discharge are:

• Child support • Debts arising from fraudulent conduct • Government guaranteed student loans • Alimony • Personal injury lawsuits stemming from driving under the influence of drugs or alcohol

In addition, there are specified time limits that borrowers must satisfy in order to be eligible for a discharge. Borrowers who received a discharge in Chapter 7 or Chapter 11 bankruptcy must wait at least 8 years before being eligible to file for a subsequent discharge. Borrowers who received a discharge in Chapter 13 or Chapter 12 Bankruptcy must wait at least 6 years, unless they paid a significant amount of their debt in the prior Chapter 13 or Chapter 12 bankruptcy.

Eliminating Tax Debt Through Bankruptcy

At Florida Law Advisers, P.A., we help borrowers in all types of bankruptcy cases, including tax-motivated bankruptcy filings. If you have a federal tax bill that is burdensome, we may be able to help discharge your tax liability through bankruptcy. Our bankruptcy attorneys have years of experience helping clients discharge their debt and obtain a fresh start through bankruptcy.


Discharging Tax Debt Through Chapter 7:

Not all tax bills are dischargeable in bankruptcy. In order to discharge a tax bill you must satisfy all of the following requirements:

1. The tax owed must be income tax; other taxes such as payroll tax or fraud penalties are not dischargeable in bankruptcy.

2. There must be no fraud or willful evasion of the taxes owed.

3. The tax debt must be at least 3 years old. In order to discharge a tax bill, the tax return that is responsible for the tax liability must have been originally due at least 3 years prior to the date you file for bankruptcy.

4. The tax assessment must be levied at least 240 days prior to the date you file for bankruptcy.

Even if you satisfy all of the conditions above, bankruptcy will not discharge a prior recorded tax lien. Bankruptcy will only discharge your personal obligation to pay the debt. If the I.R.S. recorded a tax lien on your property prior to your filing bankruptcy then that lien will remain on the property.

In Chapter 13 bankruptcy, the payment plan must provide for full payment of the tax bill. Furthermore, simply getting a loan to pay off the tax debt will not solve the problem. Loans used to pay off a nondischargeable tax bill will also not be eligible for a discharge in bankruptcy.

Stopping Creditor Harassment

In 1978, the United States enacted the Fair Debt Collection Practices Act (FDCPA) to protect borrowers from creditor harassment. The FDCPA prohibits creditors from engaging in unscrupulous or abusive behavior when attempting to collect a debt. Florida debt collection laws add further protection to Florida residents and allows victims of creditor harassment to sue creditors in Florida State Courts. Under the Florida Commercial Collection Practices Act, a creditor found guilty of engaging in prohibited collection activities can be subjected to stiff penalties and be required to pay your attorney fees. If you are a victim of creditor harassment, contact Florida Law Advisers, P.A. for help. We will aggressively defend your rights and help put an end to the harassing phone calls and letters.

Prohibited Debt Collection Activities Include:

• Calling during irregular hours, such as before 8:00am or after 10:00pm • Pretending to be a police officer or any other law enforcement official • Communicating directly with a borrower who has hired an attorney • Contacting third parties, such as a neighbor or employer to discuss your debt • Using abusive, profane or obscene language with the borrower • Excessively frequent phone calls • Using any manner of deception or misrepresentation in an attempt to collect a debt • Disclosing information that negatively effects your reputation • Continuing to contact a borrower after receiving a notice to cease • Reporting false information to credit reporting agencies

If your creditors are engaging in any of these practices keep records of each communication the creditor has with you. Also, if possible obtain witnesses who can testify and support your allegations of the abusive debt collection practices. Our debt relief attorneys can use this evidence to bolster your case and help end the harassment.


Ending Wage Garnishments

Garnishment occurs when a creditor takes legal action to seize a portion of your wages, bank account, or other assets. In wage garnishment cases, the creditor will contact your employer and have your employer deduct a specified amount of money from your check each week to be forwarded to the creditor. Wage garnishment is not permitted in all 50 states, but in the state of Florida it is a legal method of debt collection. Fortunately, you do have many legal options to prevent or stop wage garnishments from occurring.

Before a creditor can obtain a garnishment, the creditor must receive a court order allowing them to collect the debt. The court order will allow the garnishment to continue until the amount owed is paid in full or until you take legal action to stop the garnishment. There are many types of debt that are eligible for a wage garnishment with the most common being: unpaid child support, judgments from private lawsuits, taxes, and medical bills.

Protection for Head of Households

Under Florida law, if you qualify as a head of the household you may be legally entitled to stop the wage garnishment. The head of the household is someone who pays at least 50% of the living expenses for a dependent. If you are the head of a household and your net income (after deductions) is less than $750 per week, your wages may not be legally garnished. On the other hand, if you are the head of a household and your net income after deductions exceeds $750, the income exceeding $750 may be garnished if you have signed a waiver permitting the creditor to seize the funds.

Stopping Garnishments by Filing for Bankruptcy

As soon as a bankruptcy petition is filed with the court, an automatic stay will be implemented. The automatic stay prevents a creditor from taking any form of collection action against you, including garnishing your wages. The automatic stay will even stop a wage garnishment that began prior to your bankruptcy filing. Furthermore, the bankruptcy may discharge the judgment lien that is responsible for the garnishment, thereby releasing you from all personal liability on the debt. However, not all types of debt will be discharged in a bankruptcy or affected by the automatic stay. To see if bankruptcy can help stop your wage garnishment you should contact a bankruptcy attorney for legal advice.


Protecting Your Property

Exempt Property

Exempt property is property that you do not have to forfeit when filing for bankruptcy and are instead entitled to keep. Before you file for bankruptcy or take any other debt relief measure it is important to know which exemptions you qualify for. Depending on the circumstances of your case all of your property may be exempt from the bankruptcy. On the other hand, you may be forced to liquidate precious assets if you file for bankruptcy and your property does not qualify for an exemption.

Bankruptcy laws are federally controlled overall, however, the law allows each state to create their own unique exemption laws for bankruptcy. Florida residents have the option of selecting either the exemptions granted under federal law, or the exemptions provided under Florida law. It is important to hire a bankruptcy attorney who has a thorough understanding of both federal and Florida exemptions.

Preventing a Home Foreclosure Through Bankruptcy

If you have fallen behind on your mortgage and your lender has threatened to foreclose on your home, bankruptcy may be able to stop the foreclosure and make your mortgage payments more manageable. Bankruptcy is a useful tool but it may not be the right solution for everyone. To find out more about how bankruptcy can prevent home foreclosure, contact us to schedule a free consultation with a bankruptcy lawyer at our firm. During the consultation a bankruptcy attorney will review the facts of your case and help develop a comprehensive solution to solve your financial problems.

Exempt property can include your:

• Home • Car • Pension accounts • Wages • Personal property • Jewelry • Damages awarded from personal injury lawsuits • Annuities • 401K plans • Tools used for business

For a complete list of exemptions, or to see how exemption law may affect your bankruptcy, please call us at 800-990-7763 to speak with a Tampa bankruptcy attorney. We will be glad to answer your questions over the phone, or for more in-depth questions arrange a free consultation with a bankruptcy lawyer at our firm.


The Automatic Stay:

Filing for bankruptcy will stop a home foreclosure action by your lender under the automatic stay provision of the U.S. Bankruptcy Code. When you file for either Chapter 13 or Chapter 7 bankruptcy, the court will automatically enact a stay on all debt collection actions against you. The stay requires all collection actions against you to stop immediately. Creditors and collection agencies will not be able to contact you, garnish your wages, or repossess your property while the automatic stay is in effect. The automatic stay may even put a stop to a scheduled foreclosure sale of your home. In most cases, the automatic stay will remain in effect until your bankruptcy case is discharged. The automatic stay can help provide a homeowner with more time to catch up on the mortgage or to fight the foreclosure in court.


Chapter 13 is a reorganization bankruptcy; it gives you the opportunity to reorganize your debt into a more manageable payment. In addition, it may provide up to five years time to catch up on missed payments without being charged any additional interest from your lender.

Chapter 13 may also allow you to remove a second mortgage from your home. If you have two mortgages on your home and your primary mortgage exceeds the current market value of the property, you may be able to remove the second mortgage in bankruptcy. Once the mortgage is removed from the property it will be treated like any other unsecured debt in the bankruptcy.

Reaffirmation of Debt

In most cases, borrowers file for bankruptcy because of their ability to discharge their debts. A bankruptcy discharge is a permanent court order releasing the borrower from the responsibility of having to pay the debt, and prohibits the creditor from taking any collection action against the borrower.

However, in some cases a borrower may want to reaffirm a debt in bankruptcy, rather than discharge it. A borrower will usually reaffirm a debt when the debt has collateral the borrower wants to keep, such as a car or valuable jewelry. When a debt is reaffirmed, the borrower voluntarily agrees to pay the creditor all or a portion of the money owed. If a debt is reaffirmed and the borrower fails to pay the debt, the creditor can seek repossession and other legal actions to collect the debt.

Requirements for Reaffirmation

Reaffirmation agreements are completely voluntary, meaning a borrower in bankruptcy can never be compelled to reaffirm a debt. In addition, all reaffirmation agreements must be approved by the bankruptcy court before they can become effective. A court will only approve reaffirmation agreements if:

• It is in the best interest of the borrower • It is entered into voluntarily • The borrower has the ability to repay the debt • The creditor gives something of value in return for the borrower signing the reaffirmation agreement


How Divorce Can Affect Your Bankruptcy

Reaffirmation is a good tool for borrowers, but only if it is used in appropriate situations. If the property you want to keep qualifies for a bankruptcy exemption, in some cases it may not be a good idea to reaffirm the debt. If the property is exempt the borrower will be allowed to keep the asset without having to reaffirm the debt. Which type of property and the amount that is eligible for an exemption will be determined by both Federal bankruptcy law and Florida Bankruptcy law.

If you are considering filing for divorce, it is important to know that marital debt is treated just like other marital property and is subject to an equitable distribution by the court. Equitable distribution requires the court to split all of the marital property 50/50, including debts, between you and your ex-spouse unless factors are present that would make an even split inequitable. Therefore, filing for divorce won’t necessarily eliminate your debt or transfer all responsibility for the debt to your ex-spouse.

What If a Spouse Accepts Responsibility For the Debt In the Divorce Settlement

Even if your ex-spouse accepts responsibility for the debt as part of the divorce settlement you may still be held liable for the debt. Divorce settlements are agreements between married couples; they are not agreements with creditors. Therefore, a settlement agreement between divorcing couples will not be binding on a creditor. If your ex-spouse fails to pay the debt then the creditor can seek collection actions against you. The only way to be absolved of paying the debt is to have the creditor remove your name from the loan agreements.

The Debt From Your Divorce May Not be Dischargeable in Bankruptcy:

Domestic support obligations, such as alimony and child support, are governed by special bankruptcy rules. In Chapter 13 bankruptcy, the payment plan must provide that domestic support obligations are paid in full. In Chapter 7 bankruptcy, domestic support obligations are given priority and are not eligible for a discharge. Moreover, in some cases your acceptance of debt as part of the divorce settlement may be treated as a domestic support obligation, and thus not entitled to a discharge.


Life After Bankruptcy

Credit Monitoring:

Bankruptcy may stay on your credit report for up to 10 years; however, this does not mean you have to wait 10 years to get a new credit card or buy a new home. With the help of a bankruptcy lawyer at our firm you can start to quickly rebuild your credit and put the bankruptcy behind you. At Florida Law Advisers, P.A., we provide a comprehensive strategy to help our clients rebuild their credit after declaring bankruptcy. A Tampa bankruptcy attorney at our firm will develop a customized credit restoration plan based on your specific needs. When developing a plan for you, we consider all of the circumstances of your case, including your short-term and long-term credit objectives to create a plan that is right for you. In some cases, our credit restoration plan will include:

We will get a copy from each of the three credit bureaus (Experian, Transunion, and Equifax) to ensure that all of the debts you discharged in bankruptcy are correctly reported. You can get a head start in rebuilding your credit by ensuring your credit report is accurate and updated immediately after declaring bankruptcy. In addition, we can help you send written explanations to the credit bureaus explaining why you filed for bankruptcy as well as informing them of the result of your case. This strategy may help limit the immediate effect that filing for bankruptcy can have on your credit.

Obtaining New Credit:

Credit bureaus like to see that lenders are extending you credit and that you are able to pay them back on time. In most cases, the more credit you have that is being paid back on time, the higher your credit score will be.

Realistically, you may not qualify for large amounts of credit immediately after filing for bankruptcy. However, this should not prevent you from seeking small amounts of credit. For instance, new credit cards with a balance of only $300 can help improve your credit score. While many credit card companies will be skeptical about extending credit so soon after bankruptcy, some retailers may be more willing. Retailers (such as gas stations, for example) will often have less restrictions for new applicants in comparison to the banks.

Creating a Savings Account:

Most credit cards are unsecured loans, meaning there is no collateral the lender can repossess if you fail to pay. Lenders typically have tougher qualifications and charge higher interest rates for loans without collateral. If you are not able to obtain an unsecured credit card, you should start a savings account at a credit union and make regular deposits. Even depositing $10 a month will begin to build up your savings account. Then, after a few deposits, you may be able to get new credit using the savings account as collateral.


Alternatives To Baknruptcy

There are options other than bankruptcy if you are struggling to pay your bills in a time of financial stress. In fact, other types of aid relief may be more advantageous. The right course of action will depend on the unique circumstances of your case. Contact us today to schedule a free consultation with a debt relief attorney at our firm to discover your personalized options.

At Florida Law Advisers, P.A., we strive to provide our clients with long term solutions, not just band-aids that do not solve your underlying debt problems. During our free initial consultation an attorney at our firm will carefully review the details of your case and describe all the different types of debt relief that may help solve your financial difficulties. We will fully explain each debt relief option, including the advantages and drawbacks that may occur with each proposed course of action. At the end of the consultation, you should have a firm understanding of each option and be confident in deciding which course of action is best for your needs. Whether you decide to file for Chapter 7, 13, 11, seek other forms of debt relief, or do nothing and weather the storm, you will never be charged for the initial consultation and everything you discuss with us will remain confidential.

Out-of-Court Debt Settlements:

Out-of-court settlements are legally binding agreements between you and your creditors. An out-of-court settlement may allow you to reduce the total amount owed, extend the repayment period, and lower your monthly payment. In most cases, creditors are willing to negotiate because they would rather receive a smaller portion of what is owed instead of receiving nothing at all.

It is important to have legal representation when negotiating with creditors to prevent any unwanted consequences. Your creditors will likely have a team of attorneys working to protect their interests. You should have a skilled attorney on your side protecting your rights. In most cases, you will be required to sign a settlement agreement that can be difficult to understand and may have hidden penalties that only an experienced attorney can identify. By working with Florida Law Advisers to negotiate an out-of-court, settlement you can be confident your rights are protected and you are getting a fair agreement.

Debt Consolidation:

Debt consolidation is the process of getting one large loan to pay for all of your outstanding debts. Debt consolidation is beneficial because the interest rate for the consolidation loan may be much lower than the interest rate you are currently paying on your debts. The consolidation loan may also extend the time you have to repay the debt, resulting in a lower monthly obligation. In addition, most borrowers prefer to have just one payment each month, rather than having multiple bills they need to worry about.

Loan Modifications:

The loan modification process is very similar to out-of-court settlements, except that loan modifications are specifically for mortgages. Loan modifications can lower your principal balance, extend your repayment period, reduce your interest rate, and eliminate late fees. Loan modifications are valuable tools homeowners can use to avoid foreclosure and make their mortgage payment more affordable. However, getting a loan modification can be a very time consuming and frustrating process without competent legal representation.


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Documents

Florida Bankruptcy Law E-Book · Step 4: Meeting With Creditors Within 10 days of filing for bankruptcy you should receive a notice setting the date for the meeting of creditors