Every year it seems, the levels of consumer debt in Aventura, and throughout the rest of the country, continue to rise. Today, those levels are at an all-time high. If you have debt that has become unmanageable and that you are having trouble repaying, bankruptcy may be an option you want to consider. Filing bankruptcy is much more complex than many people think. There are certain eligibility requirements you must meet, and you must follow procedural rules throughout your entire case.
If you think bankruptcy is the right choice for you, do not go through it alone. Our Aventura bankruptcy attorney will make sure you are fully prepared and will give you the best chance of getting your debt discharged or restructured.
What is Chapter 7 Bankruptcy?
The most common type of bankruptcy in Aventura is Chapter 7. If you are successful with your case, a Chapter 7 bankruptcy will allow you to discharge most or all of your unsecured debt, such as credit card and medical debt. In 2005, sweeping changes were made to the bankruptcy laws in the United States in an attempt to prevent abuse of the system. For borrowers filing Chapter 7 today, those changes include the means test requirement. To pass the means test, you must show that you do not have sufficient income to repay your current debt.
During the Chapter 7 bankruptcy process, you are also required to attend the 341 meetings, also known as the meeting of the creditors. The bankruptcy trustee will attend this meeting and your creditors have the opportunity to as well, although they are not required to. The creditors can use the meeting as an opportunity to challenge certain debts you are trying to get discharged. While the meeting of the creditors is likely the only meeting you will have to attend, the thought of it is intimidating for many people. An Aventura bankruptcy attorney can make sure you are prepared and can attend the meeting with you, as well.
The bankruptcy trustee may also seize some of a borrower’s property and sell it. The proceeds are then distributed among creditors to help cover a portion of the debt owed. Filing Chapter 7 bankruptcy though, does not mean you will automatically lose the property. Florida has many generous exemptions that can protect your property.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a good option for those who do not qualify for Chapter 7 bankruptcy. People also sometimes file Chapter 13 bankruptcy to avoid the sale of their property, which does not occur during a Chapter 13 case. The process of a Chapter 13 bankruptcy is very different from the process of Chapter 7. Your debt is not discharged during a Chapter 13 bankruptcy instead, it is restructured into a repayment plan. Chapter 13 repayment plans typically last between three to five years and the payment installments are much more affordable and manageable.
It is imperative that you comply with the payment plan while going through a Chapter 13 bankruptcy. Your case is not considered final until the plan is complete and you have made all payments. If you fail to make a payment, your creditors will have the right to take legal action against you and it can hurt the rest of your Chapter 13 case. For example, if you miss too many payments, a judge may close your case and render the repayment plan void, leaving you responsible for repaying the debt just as you were before you filed for bankruptcy.
Understanding Bankruptcy Exemptions in Aventura
It is true that during the bankruptcy process, particularly during Chapter 7, borrowers can lose some property. Florida law provides many exemptions that can protect specific assets. Exemptions are available in both Chapter 7 and Chapter 13 bankruptcy cases, but any property that is not exempt is treated differently depending on the type you file. Non-exempt property is that which is not protected and therefore, can be sold by the bankruptcy trustee.
The bankruptcy trustee will take inventory of the borrower’s non-exempt property during a Chapter 7 case and will sell it, distributing the proceeds between the creditors. The proceeds of the sale are meant to cover part or all of a debt the borrower still owes.
Again, assets are not sold during a Chapter 13 bankruptcy, but the non-exempt property must still be identified. Once an inventory has been created, the borrower is then required to pay the equity of the value in the non-exempt property. The payment amounts are added to the reorganized repayment plan or they are taken from the borrower’s disposable income, whichever amount is greater.
The bankruptcy exemptions provided under Florida law are more generous than most states in the country. To take advantage of them though, borrowers must meet certain residency requirements. Although you must only live in Florida for a minimum of 180 days before filing for bankruptcy, you must have been a resident of the state for at least 730 days before you can take advantage of the bankruptcy exemptions.
There are many exemptions borrowers can use as protection if they meet the residency requirements. Some of the most common of these include:
- Up to 100 percent of the equity in your home under the homestead exemption
- Up to $1,000 in personal property if using the homestead exemption and up to $4,000 in personal property if not using the homestead exemption
- Health, hurricane, and education savings
- Prepaid health and medical savings accounts
- Tax refunds and credits
- Prescription health aids
- Up to $1,000 of equity in a motor vehicle
- 75 percent of the federal minimum wage or up to $750 in weekly wages for the head of household, whichever is greater
Our Bankruptcy Attorneys in Aventura Can Help You Through the Process
If you are thinking about filing for bankruptcy, do not go through the process on your own. Instead, choose the right bankruptcy lawyer for you. At Loan Lawyers, our Aventura bankruptcy attorneys will ensure no mistakes are made and fully prepare you for the process so you have the best chance of a successful outcome. Call us now at (954) 523-4357 or connect with us online to schedule a free review of your case.
