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Bankruptcy

OVERVIEW

Bankruptcy is the legal process through which individuals and businesses can eliminate their debts or repay them under the protection of the bankruptcy court.  It allows people or businesses to make a fresh start after experiencing financial difficulties.

There is more than one type of bankruptcy.  The most common types of bankruptcies are (1) Chapter 7 proceedings (a liquidation of debt, eliminating most debt but exposing the debtor to loss of property) and (2) Chapter 13 proceedings (a court-supervised reorganization of debt, reducing a debtor’s monthly payment and allowing repayment to creditors over a specified period of time). Chapter 11 proceedings are available for debtors who are not eligible to file either a Chapter 7 or Chapter 13 bankruptcies.

A bankruptcy may allow the debtor to extinguish all debts and still retain many assets after the proceeding is over. Much of a debtor’s property may be exempt, that is outside of the reach of creditors. In Florida, there are a variety of exemptions available.

The new bankruptcy law includes a test, called the means test, to determine who is eligible to file Chapter 7 bankruptcy. The means test only applies to people whose debts are primarily consumer debts (e.g., credit cards, medical expenses, personal car loans, student loans and mortgages on the family home). If an individual or couple’s income is below the median income for the state, they have passed the test and can file. If the means test is not passed (i.e., income is too high) a more complicated formula, which uses expenses in addition to income, is used to determine eligibility to file for Chapter 7 bankruptcy relief.

The current median income figures applicable to the Florida means test for different sized households are listed below. These figures are revised from time to time.

FLORIDA MEDIAN INCOME

Household Size Household Income
1 person $ 40,029
2 persons 50,130
3 persons 54,584
4 persons 65,135
each additional person add $7,500

We have gathered and compiled a great deal of information regarding Florida bankruptcies for your review in the ‘Legal Information’ section of our website. For specific information regarding Chapter 7 and Chapter 13 bankruptcies, please either click on the relevant link or return to the home page and select the type of bankruptcy you are interested in from the menu. We have also prepared for you a Q & A section, which answers common questions relating to bankruptcy. Our blog addresses common bankruptcy issues, such as student loans, taxes, etc.

Hoffman, Larin & Agnetti, PA offers a free consultation for all Florida bankruptcy related issues. Let us evaluate the specific facts of your case and make recommendations that address your individual issues. We will also evaluate the possibility of workouts, loan modification, foreclosure defense and short sales. Convenient payment plans to meet your budget are available. We have offices conveniently located in Miami, Fort Lauderdale, Islamorada and Key West. You may contact us 24 hours a day, seven days a week. We look forward to helping you.