Bankruptcy Qualifications for Chapter 7 in Florida
When changes to existing laws happened in 2005, it left many people confused and worried about getting relief from debt. In fact, this fear of being denied has kept many people from filing for bankruptcy in the first place, despite facing serious financial challenges. If you are struggling against debt and would like more information about bankruptcy, we invite you to speak with one of our experienced attorneys.
At the P.R. Smith Law Group, our lawyers and staff have the knowledge and expertise to guide you through the bankruptcy process without any complications. We have handled over 50,000 bankruptcy cases and can help you easily understand whether you qualify for Chapter 7 bankruptcy.
Factors in Determining Bankruptcy Qualifications
There are two key factors that we examine to determine whether you qualify for a chapter 7: income and assets.
Median Income
If your income is less than the median income, then you probably qualify for a chapter 7 bankruptcy. The median income is established by the federal government and will vary depending on the number of people in your household. The following chart sets forth the median income for individuals and families living in Florida.
MEDIAN INCOME (cases filed AFTER 11/01/10)
|
Household Size |
Annually |
Monthly |
|
1 |
$40,029 |
$3,336 |
|
2 |
$50,130 |
$4,178 |
|
3 |
$54,594 |
$4,550 |
|
4 |
$65,135 |
$5,428 |
|
5 |
$72,635 |
$6,053 |
|
6 |
$80,135 |
$6,678 |
|
7 |
$87,635 |
$7,303 |
|
8 |
$95,135 |
$7,928 |
|
each add’l person |
$ 7,500.00 |
$ 625 |
Means Test
Even if your household income exceeds the median income as set forth above, you may still qualify for a chapter 7 bankruptcy under the second analysis called the means test. The means test is just a fancy way of describing a budget analysis. In other words, we do an in depth analysis of your budget which includes your actually income and certain expenses as allowed by the bankruptcy court. Certain income such as wages, pension and 1099 income is included in the analysis, while other income such as social security and child support payments are not. Also, certain actual expenses are included, such as your mortgage and car payments, but other expenses are limited by standardized amounts established by the federal government. In other words, we can only deduct standardized amounts for food, transportation, educational expenses, etc even though these deductions may be less than what you actually spend.
The means test is a complicated legal analysis and only a competent, experienced bankruptcy attorney should provide you with advice on how to calculate the means test. Failure to properly prepare the means test may result in your being disqualified from chapter 7.
Exempt Assets
Assuming you are under the median income, or otherwise qualify for a chapter 7 under the means test, we must then evaluate whether your assets will be exempt or protected if we file a chapter 7 bankruptcy. In Florida, any equity in your homestead is exempt, as well as certain retirement plans and annuities. Personal property, including your car, household items such as your clothing, furniture, jewelry, electronics, etc. are protected or exempt in a chapter 7, but the amounts you get to keep is limited depending on your certain circumstances. Only an experienced bankruptcy attorney can provide you with advice whether your assets are protected and how to maximize your exemptions.
Chapter 7 Is not the Only Option
While Chapter 7 is a great option, not to mention the most commonly used option, it is not the only option. If filing Chapter 7 bankruptcy is not possible in your situation, you may be able to file Chapter 13. In some cases, even if you do qualify for Chapter 7, you may want to file Chapter 13, simply because of your unique circumstances and your goals.
No matter what your situation is, our experienced attorneys will help you determine which path you qualify for and which path is right for you.
Schedule a Free Initial Consultation
As one of Florida's largest filers of bankruptcy cases, we can help you understand the process and whether filing for bankruptcy is in your best interest. Schedule a free initial consultation with a Tampa bankruptcy lawyer at P.R. Smith Law Group, P.A.
Call us at 888-682-5251 or send us an e-mail to get started today.
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