If you find yourself overwhelmed with debt, falling behind on your monthly bills, and no longer able to keep up with your living expenses, it’s time to seek a solution. For many individuals in Florida, filing a Chapter 7 bankruptcy can help get their financial lives back on track.
Chapter 7 bankruptcy, also called liquidation bankruptcy, involves the sale of a debtor’s unprotected assets, or “nonexempt property,” and the distribution of the sale proceeds to certain creditors. The process can lead to the discharge of numerous debts. However, other options may be available to help a person get the fresh start they need.
At Loan Lawyers, we take a big-picture approach to our clients’ cases and always strive to find the most sensible, affordable, and proven solutions for their legal and financial issues. To learn more about filing a Chapter 7 bankruptcy in Florida and to discuss whether it is the best option for you, contact us today. We can provide a free consultation.
What Is Chapter 7 Bankruptcy?
Through the years, our Florida bankruptcy attorneys have helped individuals and businesses throughout South Florida find relief through the bankruptcy process. In most cases, the relief comes through filing a bankruptcy under Chapters 7 or 13 of the U.S. Bankruptcy Code. It is important to know the differences between the two types of filings.
When you file a Chapter 13 bankruptcy, a judge will appoint a bankruptcy trustee to work with you on reorganizing your debts and coming up with a three- to five-year repayment plan to satisfy your creditors. However, there is no repayment plan in a Chapter 7 bankruptcy.
When you file Chapter 7 bankruptcy in Florida, a court will appoint a trustee to instead identify your debts and assets, manage the sale of any of your assets that are nonexempt and clear of liens, and then distribute the proceeds of the sale to your unsecured creditors. These creditors provided you with credit based on their assessment of your ability to pay and not on their right to seize property or collateral if you default on your payments.
The goal of a Chapter 7 bankruptcy is to receive a discharge of as many unsecured debts as possible or remove liability for those debts while holding on to your exempt property. In many cases, all of a debtor’s assets may be exempt or subject to valid liens, and, ultimately, no distribution is made to creditors. These are called “no asset” cases.
Non-Dischargeable Debts in a Chapter 7 Bankruptcy
A court will not discharge all your debts in a Chapter 7 bankruptcy. Debts which you may still be personally liable for include the following:
- Alimony and child support
- Government-backed student loans
- Debts from willful and malicious injury to an entity or its property
- Debts from causing injury or death to another in an auto accident due to driving under the influence of alcohol or drugs
- Tax liens
- Government penalties and court costs
- Restitution orders
