By September 7, 2018 No Comments
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Bankruptcy - Chapter 7

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Experienced Attorneys to Help You with Your Chapter 7 Bankruptcy Options

Chapter 7 Bankruptcy allows for the “discharge” or elimination of certain types of unsecured debts such as credit cards and medical bills. Debtors are allowed to retain certain assets, those that are exempt from liquidation and those assets that are secured as collateral for loans such as a home or automobile provided the debtor is current on those loans.

Exemptions include: retirement funds such as a pension, IRA, and 401(k) and similar funds that are restricted access for retirement; pre-paid college tuition accounts; cash value of life insurance; $1,000.00 for each debtor for personal property, including bank accounts; $1,000.00 per debtor towards the value of an automobile (to the extent it is not secured), and homestead real property. Of course, the debtor must remain timely on any liens or mortgages for an automobile or homestead real property to keep those assets.

One must qualify for a Chapter 7 bankruptcy by having debts in excess of exempt property values and satisfying the income eligibility requirements known as the “means test.” This test is complicated since it takes into account all household income including non-filing spouses; the total number of dependents, and the geographical location of the debtor’s residence. The means test provides certain allowances for housing, transportation, food, insurance, and other items. The ultimate question determined by the test is whether the debtor has the means to pay a portion of their unsecured debts over time after all factors are applied to the debtor’s finances. If one has the means to pay then the debtor is required to file under a different chapter, typically Chapter 13, which will require payments over time to the court for the benefit of creditors.

The liquidation occurs by the court-appointed trustee. Those assets that are not secured by a lien or mortgage and are not exempt from liquidation are sold to raise money for creditors. Creditors who file valid proof of claims receive a pro-rata distribution of the liquidation proceeds. In many instances, the Trustee will allow the debtor to retain possession of these assets provided the debtor pays the value to the trustee in a short timeframe.

Chapter 7 bankruptcy is thought of as providing rapid relief to a debtor since an automatic stay occurs on filing which prohibits creditors from initiating or continuing any legal actions against the filing debtor. All debts incurred and assets acquired after the filing, subject to very few limitations, are not subject to the bankruptcy.

If you are considering bankruptcy, please fill out our online Bankruptcy Questionnaire to receive a free telephone discussion with one of our experienced bankruptcy attorneys. During this free telephone discussion the attorney will go over your financial situation and your bankruptcy options.

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Bankruptcy Attorney

The times that you need a Bankruptcy Attorney are stressful. Put our experience to work for you, and put your mind at ease.

Bankruptcy - Chapter 13

Bankruptcy - Chapter 13

Not eligible for Chapter 7? Chapter 13 bankruptcy could be the answer! Learn about individual reorganization options

Have Questions regarding Bankruptcy?

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Bogin, Munns & Munns Can Help with Your Bankruptcy Case

Don’t let debt control your life. Our Central Florida bankruptcy attorneys can help you decide which options are best for your individual situation.

Fill out our Bankruptcy Questionnaire today to qualify for a free telephone consultation with our attorneys.

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