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Bankruptcy Attorneys

Chapter 7

Chapter 7 of §11 of the United States Code, the “Bankruptcy Code” is commonly referred to as a straight Bankruptcy. Under chapter 7, your bankruptcy attorney files a detailed petition asking the court to discharge your debts along with numerous detailed required attachments including a complete list of all creditors with their names and addresses (commonly referred to as the “creditor matrix”), a certificate showing completion of a credit counseling briefing within 180 days prior to filing, a statement of financial affairs, detailed “schedules” separately showing all real property, personal property, secured and unsecured claims, and all “executory” contracts and leases. Statements showing your current monthly income and current expenses along with various other forms, notices and documents are also required.

The basic idea in a chapter 7 bankruptcy is to wipe out or discharge your debts in exchange for giving up property, except for property that is “exempt” from the bankruptcy “estate.” In some cases, all of your property will be protected, but property which is not, is sold by the bankruptcy trustee. The proceeds from the sale of your non-exempt property is used to pay unsecured creditors. All “priority” debts are paid first from the proceeds. Then, any unsecured, un-prioritized debts are paid from the remaining funds, if any. Any remaining unpaid, unsecured debts, regardless of how much is received via the sale of non-exempt property, will then be discharged at the end of a chapter 7 case.

Your income level plays a huge role in a chapter 7 bankruptcy. In most cases, if your income is below the Florida median family income for a family of your size, you will have an automatic right to obtain a discharge of your unsecured debts in a chapter 7. However, if your income is above the state’s median, you might still qualify for a chapter 7 bankruptcy but must first pass a “means test.” A means test requires filling out a form detailing information about your income and expenses. If the results, which are based on standards in the bankruptcy code, show that your “disposable income” is below a certain level or percentage of your non-priority, unsecured debt, you can still file and receive a discharge in a chapter 7 case. For more information on the median income levels, please see www.census.gov/hhes/www/income/income.html.

If you want to keep certain property that is not usually protected in a chapter 7 discharge, a chapter 13 might be a better fit. For more information on bankruptcy or how we can help you with all of the above and more, please feel free to call or contact our bankruptcy lawyers today. If you or someone you know is considering filing for bankruptcy, let the lawyers at Rosen & Rosen serve you!

We are a debt relief agency. In addition to other legal services, we help clients file for bankruptcy relief under the Bankruptcy Code.