If you are reading about this area of our practice, you are probably waist deep in financial distress; being sued, wages garnished, or property foreclosed upon, and wondering whether bankruptcy will provide the relief you need.
Bankruptcy will help; it will give you immediate relief from all creditor action and allow you to restructure your affairs, but it can’t solve the ultimate problem, which is less money coming in than going out. For that you will need financial discipline and a commitment to save for the future.
There are two forms of bankruptcy for individual debtors : Chapter 7 –liquidation of non-exempt assets and Chapter 13- reorganization with a plan of repayment to creditors. For most debtors, Chapter 7 is the desired- method as it requires no repayment and it can be done and over in a matter of months, however Chapter 7 is only available to those debtors whose “adjusted” income does not exceed the median income in the county in which they live. Those whose “adjusted” income exceeds that amount may file Chapter 13 or in some cases Chapter 11 –business reorganization and repay their creditors a percentage of the amount owed over a 5 year period.
In Chapter 7, a debtor’s assets are subject to liquidation by the Chapter 7 trustee to be used for the repayment of creditors. The debtor is allowed to keep certain exempt assets, which in most cases will allow a debtor to keep all of his property, as people who have been in financial problems for a while will have depleted most of their assets before they file. Homestead in Florida is exempt, retirements accounts are exempt.
After we discuss your financial situation, we will apply a “means test” to determine whether your “adjusted” income exceeds the median county income. We will do our best to find enough legitimate deductions to enable you to qualify to file Chapter 7.
Attorney fees in bankruptcy are regulated by the Court and in most instances the attorney fee that you will pay to file Chapter 7 will not exceed $2,000.00. The filing fee is $335.00 and you will be required to take 2 instructional courses in managing your money, both of which can be taken on-line at a cost of between $10.00 and $25.00.
If you are still reading this, it would probably behoove you to call my office and set up an appointment to further discuss your options. Do not delay. If you are in foreclosure and you have a sales date coming up, filing bankruptcy before the sale will stop it. But if you wait until the sale has taken place, filing bankruptcy will not save your property.
If you have been rejected for a mortgage modification in the past, you should know that there is a new Mortgage Modification Mediation program in both Chapter 7 and Chapter 13 that may be worth trying if you think you really qualify.
Michael H. Hirsch, P.A.
Attorney At Law - Serving the People of Florida since 1989
Micheal H Hirsch P.A. Attorney At Law
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