Law Offices of Ben R. Hetfeld, lawyers in Davie and Bonita Springs, FL, Florida

Can I still file bankruptcy after the new bankruptcy law?

Yes. The new law changed the bankruptcy rules, but did not eliminate a person's right to file for bankruptcy protection. There are several different forms of bankruptcy under which a person may file. Individuals typically file either a Chapter 7 or Chapter 13 bankruptcy depending on their circumstances.

How does the new law affect my ability to file for bankruptcy?

One of the most significant changes to the Bankruptcy Code was the introduction of what is called the “means test.” The means test places a limit on the amount of income an individual or household can make in the 6 months prior to filing a Chapter 7 bankruptcy.
There is no limitation on the income earned by a person filing under Chapter 13

How much can I make and still qualify for a Chapter 7 bankruptcy?

There are many misconceptions concerning the amount of income you can make and still qualify for a Chapter 7 bankruptcy. Most of them are incorrect.

The calculation to determine whether you qualify for a Chapter 7 is complex and involves many variables. It is recommended that you contact a bankruptcy Attorney to perform this task for you.

Will my creditors stop harassing me?

Yes, they will! The filing of a bankruptcy triggers an automatic stay and by law all efforts by your creditors must cease once the bankruptcy is filed. Creditors cannot file or continue any lawsuits, seize your car, garnish your wages or even make telephone calls or send letters to you. The automatic stay allows you some “breathing room” to sort out your financial situation.

What is a Chapter 7 bankruptcy?

Chapter 7 is the most common type of bankruptcy. Over 70% of all bankruptcies are Chapter 7 bankruptcies. In a Chapter 7 the Debtor turns over all non-exempt property to the trustee who then converts it to cash for distribution to the creditors. In the majority of cases the Debtor has no assets he or she would lose. The Debtor then receives a discharge of all dischargeable debts. The purpose of Chapter 7 bankruptcy is to allow the debtor a “Fresh Start” by keeping those things necessary to live a normal life while eliminating overwhelming debt

What is a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy is a “pay back plan” where you repay all or part of your debt under supervision of the Court. This type of bankruptcy allows the Debtor to establish an affordable payment schedule to pay off non-dischargeable debt like taxes owed to the IRS or to save a home from foreclosure. The pay back plan allows for repayment of debt over a period of 3 to 5 years. In a Chapter 13 individuals are allowed to keep non-exempt property.

What property can I keep?

In most cases the Debtor keeps his or her car, house, furniture and furnishings, retirement funds and life insurance policies. The exemption laws in the State of Florida are complex and you should consult an attorney for an explanation of how they apply to your individual situation.

What debt is dischargeable?

The term “dischargeable” means that the debt is erased. You no longer have an obligation to pay the creditor. Most unsecured debt is dischargeable. This type of debt would include credit cards, personal loans, judgments. Non-dischargeable debt includes taxes due to the IRS, student loans, support obligations, secured obligations (ie, car loans and mortgages), credit obtained through knowingly giving false information to the lender and certain other obligations.

What about my house?

Your home is exempt under the Florida Constitution and Statutes. This means that creditors cannot levy against it for collection of a debt. If you are behind in your payments a Chapter 13 bankruptcy will allow you to make up arrearages through payments made in the course of the plan.

If you are in arrears on your mortgage and the lender has filed for foreclosure a Chapter 7 bankruptcy will not stop the foreclosure, it will only delay the case. You will have to pay the arrearage and cure the default in order to stop the foreclosure.

What will happen with my car?

If you own your car, that means that you don't owe anyone anything on it, and it is covered by exemption, you get to keep it.
If you are buying or leasing the car you have the option of “reaffirming” it. This means that you and the creditor agree to continue the contract in substantially the same form as it presently exists.

You also have the option to surrender the car. This means that you return the car to the creditor with no further obligation.

Can I keep any credit cards?

Whether a Debtor keeps credit cards after filing bankruptcy is up to the credit card company. If you are discharging a credit card, they will cancel the card unless you reaffirm the debt. Even if you have a zero balance, the credit card company might cancel the card.

Will filing bankruptcy affect my spouse?

Non-filing spouses will not be impacted by the filing of a bankruptcy, except for those obligations that were incurred jointly. In that case, the non-filing spouse remains responsible for the debt.

When will I be discharged from bankruptcy?

One of the major purposes of bankruptcy legislation is to afford the opportunity to a person hopelessly burdened with debt to eliminate his or her obligations and get a financial “Fresh Start.”

The discharge is usually granted within 3 to 5 months after the bankruptcy is filed.

LAW OFFICES OF BEN R. HETFELD

Cooper Office Centre
10620 Griffin Road, Suite 106
Ft. Lauderdale, Florida 33328
Phone: (954) 858-5420
Fax: (954) 858-5421

Bonita Executive Center
8891 Brighton Lane, Suite 104
Bonita Springs, Florida 34135
Phone: (239) 390-3166
Fax: (239) 390-1920

E-mail: bhetfeld@aol.com