Gary H. Baker, P.A.
Attorney and counselor at law
Representing Consumer Debtors in Bankruptcy, Foreclosure and Collections
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Bankruptcy Below is a basic overview of bankruptcy. Please remember that every case is different and everyone’s personal financial situation is different. This is a very brief overview. The information below is meant as an informative guide, and is not a substitute for qualified legal counsel.
Bankruptcy Overview ¨ Chapter 7 ¨ Chapter 13 ¨ Chapter 11 _______________________________________________________________________________
Gary H. Baker, P.A. offers a free, no obligation bankruptcy consultation. We encourage anyone considering filing a bankruptcy to come in for a personal free consultation. During the consultation we will look at your entire financial situation and can offer more specific information and guidance.
To schedule your free appointment call (727) 561-0066 or e-mail us now.
The 2005 Bankruptcy Reform Act
In October of 2005 a new bankruptcy law took effect. This “new law” made some major changes to the way in which bankruptcies are filed. It also imposed major changes to the forms and qualifications for filing different chapters of bankruptcy. One of the major changes is a new means testing to determine if a debtor is eligible to file a chapter 7 bankruptcy (“liquidation”) or if a debtor must file a chapter 13 bankruptcy ("wage-earner" or “reorganization”)
Bankruptcy Court Basics
Bankrutpcies are filed in Federal Bankruptcy Court. In
Residency Requirement
It is important to understand how your residency can effect your bankruptcy case. The importance of this will become even more clear as you read through the information below. Under the 2005 bankruptcy rules, the State exemptions that you are entitled to are determined by the State in which you have lived for the 2 years (730 days) prior to filing your bankruptcy.
Therefore, the first step in the process of filing your bankruptcy is to determine which State exemptions you are entitled to. If you have been a resident of
If you have questions on your residency and what exemptions will apply, we highly recommend that you consult with a qualified bankruptcy attorney for guidance.
To schedule your free appointment call (727) 561-0066 or e-mail us now.
Means Testing
As of the 2005 bankruptcy reform all debtors filing for bankruptcy must complete a means testing evaluation. This means testing determines whether a debtor can file a chapter 7 bankruptcy or whether they will have to enter into a chapter 13 reorganization. One important note, there are instances where a debtor who qualifies to file a chapter 7 bankruptcy through means testing may choose to file a chapter 13 bankruptcy.
Median testing can be very complicated, and there are exceptions and special circumstances that may vary. However, in general a debtor can only file a chapter 7 Bankruptcy if their median income is less than the median income for their state. The median income for each state is published and modified frequently to keep up with current data. The median income also is adjusted for the number of people living in the household. So, a family of 4 is allowed a higher median income than a family of 2 or a single individual. Exempt Property As you read through this bankruptcy overview, you will see that one of the most important issues to you should be what is exempt property (property that you can keep) and what is non-exempt property (property the trustee can take and sell for the benefit of your creditors) Once again, the exemptions you are allowed will vary depending on your residency. However, for a debtor filing under Car: In Retirement & 401(k): Florida Statutes provide for an exemption for a variety of retirement accounts including Education Accounts: Additional If you have property that is not-exempt it will be sold by the trustee and the proceeds will be distributed among your creditors. Note: If you have non-exempt property that you wish to keep, you may be able to enter into a buy-back agreement with the trustee. If you are considering bankruptcy we encourage you to consult with a qualified attorney. An important part of every bankruptcy filing is determining which of your assets are exempt and which assets are non-exempt and may be sold by the trustee. A qualified attorney can help you through this process. Secured Debts - those debts where a creditor has a security interest in your property to guarantee payment. The most common examples of this are a mortgage or a car loan. Reaffirmation? Bankruptcy law requires you to execute a reaffirmation agreement for any secured property that you wish to keep. For example, if you want to keep your car, and you are able to continue making the car payments, you reaffirm that debt. On the other hand, you may decide to surrender your property and not reaffirm a secured debt. Federal Taxes, Student Loans, Child Support, Alimony and other exceptions There are a number of debts that are not dischargeable in bankruptcy. These include federal income tax, student loans, child support or alimony obligations, luxury goods, and any debt incurred through fraud. This is not an exhaustive list, and special circumstances and timing can effect whether or not debts are dischargeable. If you have questions about whether or not a debt may be dischargeable you should consult with a qualified bankruptcy attorney.
Personal Property: Each debtor is allowed a $1,000 exemption for all personal property. This includes clothing, furniture, tools, and cash. In other words, all of your “stuff”. When determing the value of personal property, most trustees use “garage sale value”.
401(k), pensions, IRAs and annuities.
Non-Exempt Property
To schedule your free appointment call (727) 561-0066 or e-mail us now.
Types of Debt
Unsecured Debts – those debts that are not secured by property. The most common example is credit cards, but this can also include items such as personal loans and medical bills.
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Chapter 7
Chapter 7 is the chapter of the Bankruptcy Code providing for liquidation. In other words, a chapter 7 bankruptcy is designed to liquidate (sell) all of the debtor’s non-exempt property and distribute these proceeds to the creditors. Individuals considering a chapter 7 bankruptcy should realize that the filing of a chapter 7 bankruptcy petition could result in a loss of property.
Gary H. Baker, P.A. offers a free, no obligation bankruptcy consultation. At your appointment, we can explain in detail the difference between exempt and non-exempt property, and will answer any questions you may have.
To schedule your free appointment call (727) 561-0066 or e-mail us now.
A debtor must meet the means testing requirements listed above; AND
A debtor must complete the required credit counseling within 180 days before filing; AND
A debtor cannot have been discharged from another bankruptcy proceeding within the prior 180 days; AND
A debtor may not obtain a chapter 7 discharge within 8 years of another chapter 7 filing or within 6 years of a chapter 13 filing.
How a chapter 7 bankruptcy works
The basic timeline for a chapter 7 bankruptcy will look something like this:
The debtor will file a chapter 7 petition with the bankruptcy court. This petition will include schedules listing all assets and liabilities, budget information, and answers to a detailed list of questions regarding “financial affairs”. The filing fee for a chapter 7 bankruptcy case is $299.
The case will be assigned to a judge and trustee.
A 341 meeting will be scheduled between 20 and 40 days after the filing. Copies of the debtors financial documents will be gathered and forwarded to the trustee prior to the 341 meeting. At the 341 meeting, the debtor will be put under oath and will answer questions from the trustee. Any of your creditors may attend the 341 meeting and may also ask questions.
If the debtor has secured debts for property that they wish to keep, they will execute and file with the court the reaffirmation agreement(s).
Prior to discharge, the debtor must complete a 2nd credit counseling course. This 2nd course is a financial management course and must be completed after the bankruptcy filing.
For most debtors, the entire process for a chapter 7 bankruptcy is completed within 6 months.
To schedule your free appointment call (727) 561-0066 or e-mail us now.
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Gary H. Baker, P.A.
Clearwater, Florida 33762
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(727) 561-0066
or send us an e-mail: info@BakerDebtRelief.com
We are a debt relief agency. We help people file for bankruptcy under the United States Bankruptcy Code.
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