Debt Relief & Bankrupcty Lawyers
Chapter 7 is often known as a fast-track or straight bankruptcy. Typically the process takes 4 to 6 months from start to finish.
Here are the “Pros and Cons” of Chapter 7 bankruptcy:
- Immediate relief — the day you file for CH 7, all debt collectors must immediately stop harassing you (or even contacting you!). This is known as the “automatic stay.”
- Very fast — unlike CH 13 or debt consolidation — typically there is no repayment plan.
- Keep your home! In Florida, you will not lose your home in CH 7 bankruptcy — the equity in your home is not “counted” as an asset in CH 7.
- Keep your retirement! — IRAs, 401ks, pensions and annuities are considered exempt in Florida — which means these assets are not “counted” in CH 7.
- Stops foreclosure or eviction — the filing of bankruptcy will at least temporarily stop a state court action — like a foreclosure sale.
- Rapid recovery! A person’s credit score will generally improve dramatically after completing a CH 7 – debt to income ratio has been reduced and the negative reporting by creditors immediately stops.
- CH 7, for the most part, is income based. In order to qualify, a debtor must pass the “Means Test.” The Means Test is your average monthly household income over the past 6 months. Once the monthly income is calculated, multiply that monthly number by 12 to determine the annual household income. Below is the Florida median income chart:
1 Member Household – $41,334.00
2 Member Household – $51,839.00
3 Member Household – $53,952.00
4 Member Household – $63,196.00
5 Member Household – $71,296.00
6 Member Household – $79,396.00
7 Member Household – $87,496.00
8 Member Household – $95,596.00
9 Member Household – $103,696.00
10 Member Household – $111,796.00
- If your income is more than the Florida median income for your household member number, then a further means test calculations must be completed to determine if you qualify for CH 7.
- CH 7 does not wipe out student loans;
- CH 7 does not wipe out all IRS or state taxes;
- If you have expensive property or assets – CH 7 may not be for you – you could lose valuable assets – boats, motorcycles, cars, jewelry, etc. is not “exempt” in CH 7.
The best way to determine whether you qualify for CH 7 is always a free consultation with one of Boss Law’s bankruptcy attorneys.
Free Case Review
Share your experience and we will call you
or Call Now