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Can
I still file bankruptcy after the new bankruptcy law ?
Yes. The new law
changed the bankruptcy rules, but the law did not eliminate your right to
bankruptcy protection.
Do have to take a
credit counseling course before I file bankruptcy?
The new bankruptcy law
requires all debtors to fulfill two education requirements: a credit counseling
course prior to filing and a financial management course before obtaining a
discharge. Failure to complete either of these courses and file the
appropriate certificates with the court will prevent a successful bankruptcy.
The Chapter 13 Trustee will offer the required courses to Chapter 13 debtors,
but Chapter 7 debtors are required to take the courses on their own. All
bankruptcy education courses are available in person, by phone, or over the
internet and are approved for the district in which you are filing. You
may get additional information about the costs and availability of debtor
education from our office.
Who
can file bankruptcy?
Any person residing, domiciled, or having
property or a place of business in the United States may file Chapter 7.
A business may also file a Chapter 7. The new bankruptcy law includes a
"means test" which applies an income vs. expense test in order to
file Chapter 7 bankruptcy. There are currently no minimum or maximum income
limits or other income requirements or limitations for people whose unsecured
debts are primarily non-consumer debts such as investment liability, business
losses, taxes, or student loans.
What
is a Chapter 7 bankruptcy?
Chapter 7 bankruptcy is
the most common type of bankruptcy and is often referred to as a
"liquidation bankruptcy." In Chapter 7, all of the debtor's
assets, other than those types of assets specifically exempt from liquidation
by statute, are turned over to a bankruptcy trustee for sale. Sale
proceeds, if any, are distributed among the creditors. Most Florida
Chapter 7 debtors have little non-exempt personal property because of Florida's
liberal exemption laws. Chapter 7 bankruptcy is used to eliminate, or
discharge, primarily unsecured debts such as credit cards or medical
bills. Chapter 7 does not eliminate secured debts, such as vehicles
(unless the secured item is surrendered). Chapter 7 will not save a house from foreclosure nor a car from repossession if you are delinquent in
payments. Under the new bankruptcy law, only people who pass the
"means test" may file a Chapter 7 bankruptcy. People who fail the
means test have to file Chapter 13 bankruptcy. The means test is a complicated
mathematical formula. Your bankruptcy attorney can run a means test using
bankruptcy software after he collects necessary information from you.
What is a Chapter 13
bankruptcy?
Chapter 13 bankruptcy
results in a plan to repay all or part of your debt, but it is not designed to
discharge or eliminate most debts. Chapter 13 is used most often to save
a house from a foreclosure sale. Chapter 13 is also useful to eliminate
some IRS debt and to establish an affordable plan to pay IRS debt that cannot
be eliminated. Chapter 13 bankruptcy is available to debtors with regular
income. A business cannot file Chapter 13. In addition, there are
upper limits on the amount of the individual's secured and unsecured debts in
Chapter 13 cases.
Who can file
bankruptcy in the Southern District ?
The Southern District accepts bankruptcy filings
from individuals who reside or are domiciled in one of several central Florida
counties including Miami-Dade, Broward, and other surrounding counties.
Any Florida resident can file bankruptcy in Florida. If you file
bankruptcy in Florida, however, you can only claim Florida's asset exemptions
if you have resided in Florida for the previous two (2) years. Otherwise, you
must use exemptions of the state where you previously lived for two years or,
in some cases, the default set of federal bankruptcy exemptions.
Can married people
file bankruptcy jointly?
Married debtors can file
a joint bankruptcy petition for a single filing fee, and most attorneys charge
the same legal fee for joint cases as they do for individual cases.
Married couples who are jointly liable on most debts should file a joint
bankruptcy. On the other hand, if only one spouse is liable on most of
the debts, the indebted spouse may file an individual bankruptcy, and in most
cases, the individual debtor's bankruptcy will have no adverse effect on the
non-filing spouse.
Do I need an attorney
to file bankruptcy?
Bankruptcy law does not
require that you hire an attorney to prepare a bankruptcy petition or to
represent you in your bankruptcy case. If you enjoy doing things
yourself, or if you really cannot afford an attorney, you can find forms on the
internet needed needed to file your own petition.
However, bankruptcy is a complicated area of the law, and the bankruptcy law
gives no special treatment to debtors who file their own petition. The new
bankruptcy law makes filing bankruptcy substantially more complicated and the
practice of bankruptcy law is therefore more specialized. I strongly
believe that the financial risk of filing your bankruptcy incorrectly under the
new bankruptcy law is much greater than the amount of a reasonable fee paid to
a bankruptcy attorney.
How much do attorneys
charge for bankruptcy?
In the past, most
consumer bankruptcies were relatively simple and legal fees were low. The
new bankruptcy law increases the amount and complexity of legal work required
to prepare a bankruptcy petition and successfully complete a filing, and as a
result, legal fees are higher than they used to be. Also, the amount of
work and fees will vary according to the debtor's income level. As a
general guideline, a debtor below Florida's median income should not
have to pay more than $2,500 in legal fees for a
simple Chapter 7 bankruptcy. The court charges a $299 filing fee, and
there may be other costs for financial education required by the bankruptcy
law. A debtor with income above Florida's median income will
usually have to pay $300 to $500 more as additional paperwork is required. It
is possible, but difficult, to file bankruptcy without the help of an
experienced bankruptcy attorney.
Chapter 13 cases are
more complicated, and legal fees are higher. The MIami judges expect
and approve legal fees of approximately $3,500 (in addition to the filing fee)
to file and complete a standard Chapter 13 case. If your Chapter 13 case
involves a wholly-owned business, or other complicated legal issues, legal fees
will be higher. The good news is that most attorneys require a down
payment of approximately $1,500 to $2,500 (plus the filing fee) to prepare and
file a Chapter 13 case. The balance is paid through the Chapter 13 plan
over a period of several months.
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