Free Initial Phone Consultations
Chapter 7 starting at $999, plus filing fees and costs.
Chapter 13 starting at $2,500, plus filing fees and costs.
What is bankruptcy?
Bankruptcy is a legal process that allows debtors to discharge their debts. There are several chapters of bankruptcy, under which a debtor may seek discharge. A bankruptcy case starts with filing of a bankruptcy petition in federal bankruptcy court under one of the chapters. The most common are Chapter 7 and Chapter 13.
Chapter 7 is a “straight bankruptcy” or liquidation chapter. Filing a petition under Chapter 7 allows debtors to discharge most, if not all, of their debts, and keep most, if not all, of their property. See Chapter 7.
Chapter 13 is a re-organization chapter, or repayment chapter. It operates as a consolidation loan. It allows debtors with regular income to catch up on their payments or re-organize their debts and make affordable payments for a partial or total repayment of their debts over a period of 3-5 years. See Chapter 13.
When should you consider bankruptcy?
You should consider filing for bankruptcy if your income is not enough to cover your everyday expenses and debts, or if you are facing credit card debt collection or lawsuits, foreclosure, repossession, wage garnishments, bank levies, driver’s license suspension due to an outstanding judgment, etc. Bankruptcy filing under any chapter immediately stays most creditor collection activity against the debtor or the debtor’s property. However, the automatic stay is not permanent. It is only in effect during the pendency of the bankruptcy case, although secured creditors may be able to lift the stay under certain circumstances.
At the very least, the automatic stay gives debtors temporary relief from collection activity. See Automatic Stay. In Chapter 7 cases, many secured creditors choose not to lift the stay since it will terminate upon discharge and in most cases, it takes as little as 3 months to get Chapter 7 discharge. In Chapter 13 cases, it gives debtors a chance to keep their property by catching up on payments or reorganizing the debts, something that debtors may not be able to do successfully and/or effectively outside of bankruptcy.
When to consider Chapter 7.
Chapter 7 may be ideal for debtors with below median income or little disposable income (income left over after payment of necessary living expenses), little assets, significant unsecured debts, such as credit cards, medical bills, judgments, and no or low nondischargeable debts, such as student loans, certain taxes, domestic support obligations, criminal penalties, etc. In most such cases, debtors may discharge all of their unsecured debts and retain all of their property without any repayment of their debts.
Chapter 7 may not be a good fit for debtors with secured debts if they are in default, but would like to retain the encumbered property, because Chapter 7 does not permit debtors to cure a default over the secured creditor’s objection. Instead, debtors would have to redeem the property by paying the entire balance owed in a single lump sum payment. Obviously, mortgage redemption is not feasible for most Chapter 7 debtors, and it may be better to proceed under Chapter 13, which permits payments to catch up on arrearages.
However, Chapter 7 redemption may be a great option for debtors with an up-side-down car loan, especially a “buy here pay here” type of loan, which are often substantially underwater. Chapter 7 debtors can redeem their car from the creditor’s lien by paying its retail value, or in some jurisdictions, trade-in value, and discharge the remainder of the loan. To take advantage of this opportunity, a debtor may even be able to finance the full redemption amount while in bankruptcy. See Reaffirmation and Redemption in Chapter 7.
When to consider Chapter 13.
Chapter 13 may benefit debtors with regular income and secured debts in default, as in the case of mortgage foreclosure, if they want to retain the encumbered property. It allows debtors to modify their secured debts, except those secured by their principal residence. For a mortgage on debtor’s principal residence, the Chapter 13 debtor can reinstate the defaulted secured debt on their home by continuing to make regular monthly mortgage payments and catch up on the missed payments, with interest, over the term of the plan.
With respect to other secured debts, such as rental or vacation properties, and car loans, except those purchased within 910 days prior to the bankruptcy filing, Chapter 13 allows debtors to substantially modify their repayment obligations to retain the property. For example, debtors may pay the current value of the collateral over the term of the plan, while treating the balance as unsecured debt, most of which may be discharged after completion of the plan without full repayment. Debtors may also reinstate the defaulted secured debt, reduce the amount of monthly payments and interest, and extend the repayment period.
What is the difference between Chapter 7 and Chapter 13?
Eligibility
Treatment of Unsecured Debts
Treatment of Secured Debts
Treatment of Debtor’s Property
Foreclosure
Can only one spouse file for bankruptcy?
Married debtors may file for a Chapter 7 or Chapter 13 bankruptcy either individually or jointly with their spouse. Whether a married debtor should file separately or jointly with the spouse depends on facts and finances of each individual case.
The first consideration is whether the spouses own their property jointly or separately. Under Florida law, a married couple is presumed to own property as tenants by the entirety, unless the deed or other document conveying property states otherwise. Property held as tenancy by the entirety is immune (exempt) from levy or seizure of a creditor of an individual spouse. Only a joint creditor of both spouses may force liquidation of the tenancy by the entireties property not otherwise exempt.
A Florida debtor filing separately may be allowed to exempt any property held as tenancy by the entirety in bankruptcy – real property, including homesteads, personal property, promissory notes, checking accounts, etc. to become exempt without size restrictions.
The second consideration is whether the spouses own their debts jointly or separately. In cases where only one spouse has debts or one spouse has debts that are not dischargeable, it may be advisable to have only one spouse file. In cases where there is a lot of joint debt, filing jointly could be the best option.
Another consideration is ability to double some exemptions when filing jointly. For example, in Florida, a motor vehicle exemption of $5,000 or a personal property exemption of $1,000 in an individual bankruptcy case can be increased to $10,000 and $2,000 respectively when filing jointly. The wild card exemption of $4,000 for a single person can be increased to $8,000 for joint filers.
Finally, there are procedural advantages for filing jointly. First of all, 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. Second, a joint filing is more efficient because debtors will only need to gather the documents once and will attend all hearings together.
How much does bankruptcy cost?
Our Bankruptcy Fees and Costs
Basic No-Asset Consumer
Chapter 7
999
Plus Filing Fees and Cost:
Filing Fees $338
Administrative Costs $150
Credit Counseling Course $14.95+
Financial Management Course $6.95+
Basic Consumer
Chapter 13
2,500
Plus Filing Fees and Cost:
Filing Fees $331
Administrative Costs $200
Credit Counseling Course $14.95+
Financial Management Course $6.95+
Why are our bankruptcy fees so competitive?
In comparison with other bankruptcy attorneys, we can offer very affordable attorney flat rate fees because we do not have an expensive advertising budget, high rent costs, or employee costs. Because our fees are extremely competitive, we require that all fees and court costs are paid prior to the filing of the bankruptcy petition.
Our flat fees are based on the complexity of the case and the anticipated work so that each client pays only for what they need and not the average work performed in a case. For example, in a basic no-asset consumer Chapter 7 case, the flat fee includes review of the case, legal counseling on all matters, preparation of all documents necessary to file the bankruptcy case, the attorney’s appearance at the meeting of creditors, and any other routine work necessary in the representation of the case. This attorney fees do not include missed 341 meetings, amendments to schedules, reaffirmation or redemption agreements and related proceedings, motions to dismiss filed by the U.S. Trustee, or any other evidentiary hearings, contested matters or adversary proceedings.
In most cases, there are no additional fees billed to the client beyond the initial retainer. Occasionally, however, unexpected issues may arise requiring additional work. The client will have to sign a separate retainer and pay separately for any work not covered by the initial retainer.
Payment of the legal costs can be paid by cash, money order, check, or debit from your checking account. We do not allow our clients to use their credit cards to make payment for bankruptcy fees because this would violate bankruptcy law. However, we may accept payment from the client’s relative or friend who is willing to help them with the expense by using his or her credit card, as long as the transfer is a gift, not a loan. Otherwise, the debtor will have to list this debt in the bankruptcy schedules.
Furthermore, bankruptcy clients should keep in mind that if they take out cash advances, for whatever reason, totaling more than $1,100 within 70 days of filing bankruptcy, the credit card company could file a lawsuit asking the court to declare that the debt non-dischargeable.
How can we help?
Whether you qualify for bankruptcy or whether bankruptcy is even in your best interest depends on several factors, such as your income, assets, type of debts you have, etc. Furthermore, because not all debts can be discharged in bankruptcy or timing of a bankruptcy filing may affect dischargeability of certain debts, bankruptcy should never be approached casually. Bankruptcy involves thorough review of financial information and meticulous preparation of court documents. With legal guidance you may be able to protect more assets and discharge more debt.
If you are considering filing for bankruptcy, call us now for a free initial phone consultation to determine whether bankruptcy is an option for you. Furthermore, just because bankruptcy may be an option, it may not be the only option or the best option in your particular situation. There are many alternatives to bankruptcy, such as debt settlement, debt consolidation, liquidation of assets, asset protection, and sometimes even just knowing your rights and doing nothing.
At Anna Handy Law Firm, P.A., we are acutely aware of the financial strain of our clients. We do not charge you for the initial phone consultation. We do not push you to file bankruptcy to get a retainer. We don’t judge – we find solutions. We give you honest advice about your options and rights, including the “doing nothing” approach. As such, we offer very affordable bankruptcy fees. We make our fees competitive and in certain cases, we offer payment plans to address each case individually as each case has a different set of circumstances.
If you are overburdened by your debts, being sued or harassed by creditors, or subject to wage garnishment, do not hesitate to call us now for a free initial phone consultation. The attorney’s direct business cell phone number is (386) 248-3000. You may also email us at [email protected].