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A Florida Bankruptcy Attorney Will Fight For Your Future
At Martin Law Firm, P.L, we understand the emotional rollercoaster bankruptcy can cause. We have supported many clients through this emotional process, and we are here to do the same for you. Bankruptcy is difficult, but it can be a positive way to regroup and emerge stronger.
You are not alone in fighting this terrifying financial time.
Bankruptcy is never something anybody wants to endure, but it does provide you with a fresh start and a road to recovery.
How We Can Help You
We are bankruptcy attorneys serving Fort Myers, Cape Coral, Naples, and Tampa clients. This is your opportunity to get it right when filing for bankruptcy. Our team has the experience it takes to represent you properly.
Our Florida bankruptcy attorneys are available to assist you through the process and provide legal advice to determine whether bankruptcy is your best option. We can help you erase debts and start you on the road to financial recovery. Some of the benefits a bankruptcy lawyer can help you with include:
Any legal steps as important as filing bankruptcy require a bit of meticulous planning. Our Florida bankruptcy attorneys can discuss options other than bankruptcy, help you decide which type of bankruptcy is best for your unique circumstances, and guide you through the bankruptcy process.
Prepare for Bankruptcy
Once you have decided that bankruptcy is your best option and what type of bankruptcy is most suitable for your needs, we can help you prepare for filing. Our attorneys will walk you through processes such as the “means test,” the valuation of your property, the application of exemptions that may be available, and determining which assets will or won’t be discharged.
Guide You Through the Bankruptcy Process
Finally, we can guide you through the actual process, including tasks such as completing schedules, providing testimony, representing you at hearings, and handling creditors.
Rebuild Your Credit
We can help you begin to restore your good credit.
What is Bankruptcy?
Bankruptcy can help you gain a fresh start. If you are having trouble paying your debts, bankruptcy could be the answer.
Bankruptcy is a legal proceeding, and all cases are handled in federal court. The right to file is provided by federal law and is specifically provided for in the U.S. Constitution.
Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you. After completing the bankruptcy process, your debts are forever discharged by the bankruptcy judge.
Our Florida bankruptcy attorneys are available for a free consultation; contact us today.
Is Bankruptcy is Right for You
Deciding whether or not to file bankruptcy is an important decision, which you can only make. However, our Florida bankruptcy lawyers can help you consider the various aspects, such as:
- Whether you are even eligible for bankruptcy
- Understanding which debts will be canceled and which will not
- Considering what will happen to your home, car, or other significant property
- Whether your credit cards will be paid off during a bankruptcy
- Whether your long-term benefits, for example, your IRA, are at risk
- The effect that bankruptcy may have on your personal life
Warning Signs It Is Time To Start Considering Bankruptcy
There are danger signs that can alert you if you need to start considering bankruptcy, including:
- You are consistently missing payments or making late payments
- You owe more on your home than it is worth
- You are constantly receiving debt collection calls
- You find yourself turning to high-interest loans or credit cards to pay for common expenses, such as groceries, rent, gas, etc.
- You are borrowing from one company to make payments to another company
Different Types of Bankruptcy
- Chapter 7 Bankruptcy: Chapter 7 bankruptcy is known as “straight” bankruptcy or “liquidation.” In three to six months, the debtor should be able to liquidate all nonexempt property and liquidate all debts. It requires an individual to give up property that is nonexempt under the law. That property can be sold to pay creditors. Generally, those who file Chapter 7 keep all of their property except property that is very valuable or subject to a lien that they can not avoid or afford to pay. In many cases, the Chapter 7 Trustee will allow a debtor to repurchase their nonexempt assets to keep the additional nonexempt property.
- Chapter 11 Bankruptcy: Businesses generally file under Chapter 11, also known as “reorganization,” is used by businesses and a few individuals whose debts are very large.
- Chapter 12 Bankruptcy: This type of bankruptcy is reserved for family farmers and fishermen.
- Chapter 13 Bankruptcy: Chapter 13 Bankruptcy is a type of “reorganization” used by individuals to pay all or a portion of their debts over three to five years using their current income. Most people filing bankruptcy will want to file under either Chapter 7 or chapter 13. Either type of case may be filed individually or by a married couple filing jointly.
Chapter 7 vs. Chapter 13 Bankruptcy
Put very simply; Chapter 7 allows you to discharge most of your debts and quickly get on track to a fresh start. Your disposable income must be low enough to pass the “means test.”
Chapter 7 is generally favored by most who qualify.
Chapter 13 allows you to keep your assets, reorganize your debt, and pay them off over time. This is the only choice for those who do not qualify for Chapter 7.
The court’s filing fees are different if you are filing under Chapter 7 or Chapter 13.
Learn more Chapter 7
Learn more Chapter 13
Debts That Can Be Eliminated With Bankruptcy
Bankruptcy will eliminate all your debts with some exceptions:
- Money owed for child support or alimony
- Most fines and penalties owed to government agencies
- Most taxes and debts incurred to pay taxes can not be discharged
- Student loans, unless you can prove to the court that repaying them will be an “undue hardship”
- Debts not listed on your bankruptcy petition
- Loans you got by knowingly giving false information to a creditor
- Debts resulting from “willful and malicious” harm
- Debts incurred by driving while intoxicated
- Mortgages and other liens which are not paid in the bankruptcy case
Florida Bankruptcy Exemptions
When you file for bankruptcy in Florida, many of your assets are protected due to asset protection laws called exemptions. These laws shield your assets from the Bankruptcy Trustee and creditors, helping you to live a stable life and maximize your fresh start.
One of Florida’s bankruptcy laws’ underlying themes is that a debtor should be allowed a “fresh start” after completing the bankruptcy process. Consistent with this theme has been the development of Florida’s bankruptcy exemptions. When an individual files for bankruptcy, a bankruptcy estate is created. When an item is claimed as exempt, in essence, that item is removed from the bankruptcy estate and is no longer available to satisfy the claims of the creditors.
Many people go into the bankruptcy process terrified that they will lose their homes, cars, or other personal property. Exemption statutes permit a debtor to keep a certain amount of property and are one way that individuals can protect their assets when they file for a Chapter 7 or 13 bankruptcy.
Although the Federal bankruptcy law provides a list of uniform exemptions, it allows individual states to opt out of these exemptions. Florida has taken advantage of this provision and has developed its exemptions independent of the bankruptcy code.
To be eligible for Florida’s bankruptcy exemptions, an individual needs to have been a permanent resident of the state of Florida for two years immediately preceding the bankruptcy filing date. If you have not been a permanent Florida resident for this time period, your bankruptcy exemptions will be those from the state in which you were previously domiciled.
The most notable Florida bankruptcy exemption is Florida’s Homestead Exemption. Guaranteed in the state constitution, with some exceptions.
Homestead Bankruptcy Exemption
Florida has an unlimited homestead exemption which allows you to keep your home out of the bankruptcy estate.
- To qualify for this exemption, you must have owned your home for more than 1,215 days.
- If you have not owned your residence for this amount of time, Florida still allows you to claim this exemption. However, this amount is limited to $136,875 of equity per person.
- If a married couple files together and both are on the deed to the house, this amount is doubled.
- However, the Homestead Exemption is limited to homes situated on ½ an acre of land if you live in a municipality or 160 acres if you live outside of a municipality.
Automobile Bankruptcy Exemption
Florida law also provides an automobile exemption that allows you to keep $1,000 worth of equity in a vehicle.
General Bankruptcy Exemption
There is also a general exemption that can be applied to any of your personal property.
- The value of this exemption depends on whether you take advantage of the Homestead Exemption or not.
- If you use the Homestead Exemption to keep your home, you are limited to $1,000 of personal property per person.
- However, if you are surrendering your home, you are given an additional exemption of $4,000 for a total exemption of $5,000 for personal property.
Property Interests Exemptions
Our clients are often surprised to learn that many other property interests are also exempt from the bankruptcy estate and thus protected from creditors.
Certain types of life insurance policies along with retirement plans might be exempt from the bankruptcy estate. With some exceptions, this includes 401k, IRAs, and most pension plans. Bankruptcy laws can also prevent creditors from seizing your retirement, disability, and other types of government assistance that you might receive in the future.
Nonexempt Property in a Bankruptcy
Although Florida does have generous bankruptcy exemptions, in many cases, there will be non-exempt property. The non-exempt property becomes part of the bankruptcy estate, and a trustee will be appointed to administer it. The non-exempt property that has any value will then be sold and repaid back to the creditors.
Applying exemptions correctly is one of the most critical aspects of preparing a bankruptcy petition. At the Martin Law Firm, we analyze every case carefully to maximize the amount of property that you are allowed to keep under the bankruptcy laws. Making sure that you receive the maximum amount of exemptions is just one of the ways that we can protect your assets when you file for Chapter 7 or Chapter 13 bankruptcy.
Determining the Value of Bankruptcy Exemptions
The amounts of the exemptions are doubled when a married couple files together. Again, you may be required to use state exemptions which may be more or less generous than the federal exemptions.
If you are married and your spouse is not filing for bankruptcy, you may be able to exempt all your joint property. This is true for property held under Tenancy by the Entirety.
Valuing Property for Bankruptcy Exemptions
In determining whether the property is exempt, you must keep a few things in mind. The value of the property is not the amount you paid for it, but what it is worth when your bankruptcy case is filed. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.
Determining Equity in Your Exempt Property
You also only need to look at your equity in the property. That means you count your exemptions against the full value minus any money you owe on mortgages or liens.
For example, if you own a $50,000 house with a $40,000 mortgage, you have only $10,000 in equity. You can fully protect the $50,000 home with a $10,000 exemption.
Bankruptcy Exemptions May Not Affect Your Secured Creditors
While exemptions allow you to keep property even in a Chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a Chapter 13 case, you can keep all of your property if your plan meets the bankruptcy law requirements. In most cases, you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy.
Important Information About The Bankruptcy Process in Florida
If you decide to seek bankruptcy relief, you can represent yourself, you can hire a Florida bankruptcy attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney.
The law requires an attorney or bankruptcy petition preparer to give you a written contract specifying what the attorney or bankruptcy petition preparer will do for you and how much it will cost. Ask to see the contract before you hire anyone.
Routine Bankruptcy Case in Florida
The following information helps you understand what must be done in a routine bankruptcy case to evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.
- Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and determine which form of relief is most likely to be beneficial for you.
- Be sure you understand the relief you can obtain and its limitations.
- To file a bankruptcy case, documents need to be prepared correctly and filed with the bankruptcy court; these include a Petition, Schedules, a Statement of Financial Affairs, as well as in some cases, a Statement of Intention.
- You will have to pay a filing fee to the bankruptcy court.
- Once your case starts, you must attend the required first meeting of creditors where a court official may question you called a “trustee” and/or by your creditors.
- If you choose to file a Chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. No creditor is permitted to coerce you into reaffirming your debts.
- If you choose to file a Chapter 13 case, you may also want help preparing your Chapter 13 plan and the confirmation hearing on your plan before a bankruptcy judge.
- If you select another type of relief under the Bankruptcy Code other than Chapter 7 or Chapter 13, you will want to find out what should be done from someone familiar with that type of relief.
- Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice.
Other important factors to be aware of if you are considering the bankruptcy process include:
- Utility services: Public utilities, such as the electric company, can not refuse or cut off service because you have filed for bankruptcy. However, the utility can require a deposit for future service.
- Discrimination: An employer or government agency can not discriminate against you because you have filed for bankruptcy. Government agencies and private entities involved in student loan programs also can not discriminate against you.
- Driver’s license: Some people have lost their license solely because they couldn’t pay court-ordered damages caused in an accident. Bankruptcy may allow you to get your license back.
- Co-signers: If you file for bankruptcy, any co-signer of that debt may still be obligated to pay your debt. If you file under Chapter 13, you may be able to protect co-signers.
Your Rights & Bankruptcy Violation by Creditors
Did you know that many of your creditors are forbidden from approaching you again after you apply for bankruptcy protection?
When an individual files for bankruptcy, they are referred to as a debtor. A debtor receives all of the bankruptcy code’s rights as soon as they file for bankruptcy protection. The automatic stay clauses are the most significant protections provided by the bankruptcy code.
If you receive phone calls, statements, or letters trying to collect a debt during or after your bankruptcy filing, please notify our office immediately as you might have a claim against that creditor or debt collector. You should also keep a record of all phone calls and correspondence that you receive, as it may serve as critical evidence in a possible lawsuit against that creditor or debt collector.
There are two very important provisions of the Bankruptcy Code that limit the amount of communication and collection activity that a creditor or debt collector can take against a debtor.
Once a bankruptcy petition is filed, the bankruptcy code’s automatic stay provisions operate as a stay of any action to collect or recover a claim that arose before filing the petition. This means that it is a violation of federal law for a creditor or debt collector to call or mail any correspondence to a debtor to collect a debt in most bankruptcy cases.
All lawsuits and foreclosures also must come to a halt, at least temporarily. In most cases, the automatic stay will remain in place until the debtor receives a discharge of their debt. A creditor may file a motion with the court to have the automatic stay lifted, but this usually takes at least some time to complete, and interested parties have a right to file an objection.
There are limitations on the automatic stay for debtors who have filed more than one bankruptcy case within the past year.
- If a debtor has previously had a case dismissed within the past year of filing a second bankruptcy case, then the automatic stay is only in place for 30 days.
- If the debtor has had more than one case dismissed or pending in the past year, there is no stay in place.
In both these situations, the debtor’s attorney would need to file a motion with the court for the debtor to receive protection from the stay. In most cases, the debtor would need to show the court that there was some type of circumstance change or some other type of good faith reason for dismissing the previous bankruptcy filing.
Bankruptcy Courts have implied authority to enter an Order of Contempt against creditors who violate the automatic stay and may award damages for willful violations. Such damages include actual damages, including attorney’s fees and emotional distress, along with an award of punitive damages.
Upon successful completion of their bankruptcy case, a debtor usually receives a discharge of their pre-petition debt. The Discharge Injunction now prevents a creditor or debt collector from commencing or continuing any action to collect a pre-petition debt.
Mortgage holders or other secured creditors are now limited to in rem relief only and cannot collect from a discharged debtor personally. This means that they still have a right to take back the collateral, such as the home securing the debt, but they cannot go after the debtor personally for any additional funds. All phone calls, statements, collection letters, and other forms of communication trying to collect pre-petition debt are now prevented by federal law.
There are certain debts that the Bankruptcy Code has determined not to be dischargeable in bankruptcy. These debts include, but are not limited to:
- Domestic support obligations such as alimony and child support
- Certain federal and state taxes
- Fines to government entities
- Instances where the debt was obtained by fraud
In recent years Bankruptcy Courts have become much less tolerant to creditors who violate the automatic stay or discharge injunction.
As discussed above, bankruptcy courts have the authority to enforce the Automatic Stay provisions and the Discharge Injunction. If a creditor routinely violates these provisions, a debtor can be awarded damages, including punitive damages and attorney’s fees.
Before deciding to file for bankruptcy, you should at least consider the following alternatives:
- Stop Creditor Harassment. If the constant phone calls, harassment, and overdue notices are your primary concern, you can stop creditor abuse through federal and/or state debt collection laws. These laws are designed to protect you from abusive and harassing debt collector conduct.
- Negotiate. If you still have some financial wriggle room, consider negotiating directly with your creditors. This may buy you some time to recover and even reduce your debt into something manageable, especially if you can show them your negative income to debt ratio.
- Credit Counseling. Even if you feel unable to negotiate directly, you can get help from a nonprofit credit/debt counseling agency, which can work with you to help you repay your debts and improve your financial strategies.
Consult a Dedicated Florida Bankruptcy Attorney in Cape Coral or Fort Myers
At Martin Law Firm, we pride ourselves on looking after ordinary people’s needs, just like our family who work hard and care about their financial future and their loved ones’ future.
We provide a free consultation to help you learn more about the complexities of bankruptcy, which type of proceeding may be right for you, and the steps you need to take. Our seasoned team of legal professionals can guide you through every phase of the process, ensuring that you understand your rights and what is happening with your case. Call our Fort Myers and Cape Coral, Florida bankruptcy attorneys at (239) 443-1094 or contact us online to get started. We represent people in Naples, Miami, Tampa, and other South Florida cities going through bankruptcy under Chapter 7, Chapter 11, or Chapter 13.