If you feel as though you are suffocating under a high pile of debt, you may have already thought about filing for bankruptcy in Hollywood, Florida. Bankruptcy is a great option that can provide you with a clean financial slate and give you the opportunity to rebuild your credit. Of course, filing bankruptcy also allows you to manage your daily expenses better. While bankruptcy brings many benefits, the process is not always a straightforward one.
There are several different types of bankruptcy, and not all of them are appropriate for all situations. The type you file will depend on the amount of debt you currently have, your goals, and your ability to repay the debt. For many, Chapter 7 is the first type of bankruptcy they think of. While this is the most common type of bankruptcy, Chapter 7 bankruptcy is not for everyone. Below, our Hollywood Chapter 7 bankruptcy attorney explains the laws surrounding this process, as well as the process you will have to navigate.
Understanding Hollywood Chapter 7 Bankruptcy
Also known as liquidation bankruptcy, Chapter 7 bankruptcy allows a borrower to discharge their debt completely so they are no longer responsible for paying it. The term ‘liquidation’ bankruptcy comes from the fact that the process involves liquidating the borrower’s assets and distributing the proceeds among the creditors and debt collection companies the applicant currently owes. Any remaining debt is then discharged. Creditors and debt collection companies cannot try to continue to collect the debt, and the debtor is no longer responsible for paying it back.
While a borrower’s assets are sometimes sold during the Chapter 7 process, that is not always the case. There are many exemptions under federal law, and the different states also outline their own. Fortunately, Florida law allows for some of the most generous exemptions in the country. Here, it is not uncommon for a person to file Hollywood, Florida Chapter 7 successfully and not lose any of their assets.
Qualifying for the Chapter 7 Means Test
Federal lawmakers made drastic changes to the Bankruptcy Code in 2005. To reduce the amount of borrowers filing Chapter 7 in bad faith, or fraudulently, the means test was introduced. When a person files in bad faith, it means they have the ability to repay at least 25 percent of the unsecured debt they carry within the next five years.
The means test begins with an examination of your monthly income to determine if your income is more than the average in Florida. You can file for Hollywood Chapter 7 bankruptcy if your income is lower than the state’s average. If your monthly income is more than the average, you must pass the means test before proceeding with your Chapter 7 case. The purpose of the means test is to determine if you have sufficient income to pay off your debt. A Hollywood Chapter 7 bankruptcy attorney can explain the means test in more detail, as well as if you qualify under it.
The means test law only applies to individuals. While businesses and individuals can both file Chapter 7, businesses are not subject to the means test.
The Process of Filing Chapter 7 Bankruptcy in Hollywood, Florida
Due to your financial situation, you likely already have a lot of stress in your life. Starting the Hollywood Chapter 7 bankruptcy process may seem overwhelming at this time. Still, understanding the process can help you prepare and take the stress out of the situation. Although each bankruptcy case is unique and no two are exactly alike, the general steps involved remain the same. These are as follows:
- Contact a Hollywood Chapter 7 bankruptcy attorney: There is no legal requirement to work with a lawyer when you file Chapter 7 bankruptcy. Working with a skilled attorney, though, will give you a much better chance of success with your case. A Hollywood Chapter 7 bankruptcy lawyer will review your financial situation, advise if you qualify under the means test, and help you navigate every step of the process.
- Filing the papers with the court: Once you and your lawyer determine that Chapter 7 bankruptcy is right for you, the papers must be filed with the appropriate court. Your Hollywood Chapter 7 bankruptcy attorney will know which court to file in, and make sure the papers are filed properly.
Assigning the bankruptcy trustee: After the court has received the bankruptcy paperwork, the court will assign a bankruptcy trustee to your case. The role of the trustee is to monitor the administration of the case, determine if you have property to liquidate so debt collectors and creditors can be repaid, and they may also recover property from third parties to recover any assets that belong to the bankruptcy estate. - The Meeting of the Creditors: The Meeting of the Creditors, also known as Section 341, is a short informal meeting between you and the trustee that has been assigned to your case. You are required to attend this meeting so the trustee can ask you questions about your property, debt, and the reason you are filing Chapter 7. Creditors are not required to attend this meeting, but they can if they wish to object to certain debt you are seeking to get discharged.
- Objections to exemptions: Along with objections made by creditors, the trustee can also object to certain exemptions you have claimed on your property. If objections are made by the trustee, your attorney can negotiate a resolution with them that will allow you to retain any non-exempt assets.
- Discharge of debt: If no objections are made, the judge will order a discharge of your debt within 60 days of the Meeting of the Creditors. You are then no longer to repay this debt.
There is no way to determine how long any one Chapter 7 bankruptcy will take. Generally speaking, most cases take only 90 to 100 days before an order of discharge is issued.
How Much Does it Cost to File Chapter 7 in Hollywood, Florida?
As of 2023, the fee to file Chapter 7 is $338. You must pay the fee at the time you file. You may be able to ask for the fee to be waived if your income is more than 15 percent below the poverty line. In Florida, you can also apply to spread the fee out over a number of installments.
The credit counseling course you are required to take can be completed over the phone or online. Prices for the course range between $10 and $45, but some providers also waive these fees for low-income borrowers. Attorneys also charge different fees, but they are typically quite affordable and going through the process without legal representation can also cost you much more in the end. We have helped hundreds of bankruptcy clients through Chapter 7 in Florida. You can hear or read some of their testimonials to see how we can help you too.
Call Our Chapter 7 Bankruptcy Attorneys Near You in Hollywood
At Loan Lawyers, our Hollywood Chapter 7 attorneys can help you through the bankruptcy process and give you the best chance of a favorable outcome. Call us today at (954) 523-4357 or connect with us online to schedule a free consultation.
Hollywood Chapter 7 Bankruptcy Reviews
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