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Frequently Asked Questions

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Depending on your case, there are specific steps you need to take with your attorney to complete the bankruptcy proceeding and get a discharge. In some cases, discharges are basically automatic. Once you have received one, the clerk of the court will mail copies of it to your debtors and to the U.S. Trustee and the trustee assigned to your case. The discharge order does not specify which debts have not been discharged, in cases where a judge determined certain debts were not dischargeable. The order merely informs creditors that their debts owed by you have been discharged and they must not do anything further to try to collect those debts. Creditors who fail to heed the order can be sanctioned. You and your Tampa bankruptcy attorney will also receive a copy of the discharge.

Generally, a debtor is entitled to a discharge in a Chapter 12 or 13 case once he or she has completed the payment plan. Creditors cannot object to discharge in Chapters 12 or 13 cases. Creditors can object to the payment plan, but once the payments have all been made, creditors cannot object to discharge. Some debts are not eligible for discharge. Debtors are still responsible to pay debts that have not been discharged. Federal law lays out several types of debts that cannot be discharged in individual bankruptcy cases. Congress exempted these types of debts for public policy reasons.

There are 19 categories of debts that cannot be discharged in Chapters 7, 11 and 12 cases. Generally, certain tax debts cannot be discharged. Debts owed for alimony or spousal or child support, government fines and penalties, debts owed because of misconduct or criminal acts, certain types of government-guaranteed student loans, and condominium and cooperative housing fees are among the kinds of debts that generally cannot be discharged. Debts owed as a result of drunk driving are also ineligible for discharge. Additionally, any debts not listed by the debtor in the bankruptcy case cannot be discharged. Creditors can also request that a debt be taken out of the bankruptcy case if they can prove that the debt is due to maliciousness or fraud.

A more limited list applies in Chapter 13 cases, meaning more types of debts can be discharged. For example, debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings can all be discharged in a Chapter 13 case. Usually debts in a Chapter 13 case are only discharged after the debtor pays them according to the payment plan approved by the court. There are cases where an unpaid debt will be discharged because of a hardship. Hardship discharges are only available when the hardship is a circumstance beyond the debtor's control. Certain debts aren't eligible for a hardship discharge in Chapter 13 cases. The exemptions are similar to the exemptions in Chapter 7 cases. A Tampa bankruptcy attorney can review your case and inform you on the debts that cannot be discharged.

A judge may deny a discharge for a variety of reasons, including failure to complete a financial management counseling class. Additionally, in Chapter 7 cases, a judge may deny a discharge in cases of suspected fraud, concealment of assets, destruction of records, failure to account of lost assets or violation of a court order. There are also time restrictions built into bankruptcy law that prohibit a discharge within a certain time period of a previous discharge. Debtors receive a discharge in 99 percent of Chapter 7 cases that aren't dismissed or converted.

Creditors' Meeting

The creditors' meeting is scheduled by the U.S. trustee or bankruptcy administrator within a few weeks of the court receiving the bankruptcy petition. During the meeting, the debtor will be put under oath and must answer questions from the trustee and from any creditors who attend the meeting. In many Chapter 7 cases, no creditors attend the meeting and it's quite short. If the bankruptcy petition is a joint petition of a husband and wife, both must attend the creditors' meeting. The trustee is required to inform the debtor of the potential consequences of bankruptcy. The trustee may also ask for additional documents and records from the debtor. Within ten days of the meeting, the trustee will inform that court of whether the debtor passes the means test. A Tampa bankruptcy attorney can attend the creditors' meeting along with you and help you deal with the creditors' objections to your bankruptcy petition.

In Chapter 7 cases, creditors can object to debts being discharged. There are very specific time limits to file such objections. Additionally, the trustee or the U.S. trustee can object to certain debts being discharged. If a creditor files an objection to a debt being included in a Chapter 7 cases, a lawsuit is filed that will begin what's called an adversary proceeding.

Means Test

If a debtor files for Chapter 7 and has a monthly income is more than the state median, a judge will apply a means test to determine if the Chapter 7 filing should be considered abusive. Application of the means test is complicated and differs somewhat by state. Generally, if the debtor's current monthly income is more than $10,950 or 25 percent of debtor's non-priority secured debts, he or she may not be able to declare Chapter 7. The monthly income is figured by deducting certain allowed expenses. A debtor may petition the court to include other expenses in order to qualify for Chapter 7. If the debtor's Chapter 7 filing is deemed abusive because of the means test, the case will generally be converted to a Chapter 13 case or dismissed. A Tampa bankruptcy attorney can review your case and advise you on your eligibility for filing a Chapter 7 bankruptcy.

Trustee

In a Chapter 7 case, the case trustee is appointed by the court to administer the case, sell the debtor's assets and use the proceeds to pay the creditors. Most Chapter 7 cases are no asset cases, however, meaning there are no non-exempt assets to be sold. In these cases, creditors generally won't bother to file claims to recover their loans because there are no assets and none will be paid. The trustee's goal is to get the maximum return for the creditors by selling the assets at the highest possible price. The trustee will sell all unsecured assets and any secured assets that are worth more than the security interest on the lien.

If assets are subsequently discovered, the creditors will be notified and given the chance to file proof of their claims in the case. While there may be no legal requirement for a creditor to file a proof of claim in a bankruptcy case, there are often reasons to do so. A creditor with claims against someone who has filed for Chapter 7 protection should contact a qualified Tampa of St. Petersburg bankruptcy attorney.

There are six classes of creditors and in each class, the creditors must be paid in full before the creditors in the next lower class can recover anything. The debtor is only paid after all creditors have been paid, so generally the debtor's main concern is that certain assets are protected and that most if not all of the debts are discharged.

If you are drowning in debt, then bankruptcy may be the only way out. Bankruptcy is a legal proceeding in which a debtor initiates by filing a petition in the bankruptcy court. Bankruptcy is also an option if you are facing foreclosure. A St. Petersburg bankruptcy attorney can help you file for bankruptcy protection if you are located in Tampa Bay or surrounding areas of Pinellas County.

Bankruptcy and the Married Couple

In Florida married couples can file for bankruptcy either as individuals or file a joint petition in a bankruptcy court. The federal bankruptcy code allows married couples to file a joint bankruptcy petition. An experienced St. Petersburg bankruptcy attorney can assist you determine if you should file a joint petition or an individual petition. To file a joint petition, you must be legally married. Merely staying together will not count. If you file a joint bankruptcy petition, it will be treated as a single filing and you will have to pay the filing fee only once.

An experienced Florida bankruptcy lawyer will explain to you that the biggest advantage of a joint filing over individual filing is that in individual filing the non-filing spouse will not be protected by the automatic stay nor be eligible for the benefits of the discharge. If the individual bankruptcy petition is filed under Chapter 13, the non-filing spouse will be protected if he or she is co-debtor for joint consumer debts.

During your initial meeting with an experienced St. Petersburg bankruptcy attorney, the attorney will assist you determine whether to file a joint bankruptcy petition or individual petition. The attorney will consider the following factors to help you reach a decision:

  • The amount of debt owed
  • Joint Assets
  • Individual Assets

Generally an experienced St. Petersburg bankruptcy attorney will advise that you file a joint bankruptcy petition if one spouse has few resources or the financial affairs of the spouses are mixed up with the other. Another advantage of joint filing is that it can prevent situations where creditors attempt to collect one spouse's debt by going after the other's assets. The attorney will advise you to file an individual petition when the spouse in debt has most of his or her debt in his or her name alone or if the spouse who is not in debt has many protected assets or inheritances on the horizon.

The Role of a Qualified Bankruptcy Attorney

TAn experienced St. Petersburg bankruptcy attorney will help you determine the right bankruptcy chapter based on your circumstances. If you want to file under Chapter 7, you must pass the bankruptcy test. The attorney will explain the details of the means test. If you do not pass the means test, it does not mean that you cannot file for bankruptcy. It merely means that you cannot file under Chapter 7. You can however still file for bankruptcy protection under Chapter 13 of the federal bankruptcy code.

The fact that you are deep in debt should not prevent you from hiring an experienced St. Petersburg bankruptcy lawyer if you are filing for bankruptcy protection in Pinellas County. The benefits of hiring an experienced bankruptcy attorney are immense. Ask yourself the following questions:

  • Do you know the means test?
  • How long does it take to discharge a bankruptcy?
  • Do you know the Summary of Schedules?
  • Do you know the Schedule D, E or F?

Unless you can answer these questions without looking elsewhere for answers, you are better off hiring the services of an attorney to file your bankruptcy petition. If you want to protect your assets, then your petition must be properly filed.

St. Petersburg bankruptcy attorneys are professionals and understand how to work with the legal system to make the process of discharging debt as quick and painless as possible. Bankruptcy lawyers have the required knowledge and skill to get you a discharge. The bankruptcy court procedures are complex and even a minor error can result in your petition being dismissed. The qualified bankruptcy advice you will get from an experienced attorney can be priceless for pre-bankruptcy planning and for chalking out a successful bankruptcy strategy. The fees you pay to an experienced bankruptcy attorney will be nothing compared to the consequences on your personal life if bankruptcy proceedings go wrong.

There are many attorneys in Tampa area but only bankruptcy attorneys understand the complex nature of bankruptcy laws. Not all lawyers are well versed with bankruptcy laws. If you are located in the Tampa area and you are considering bankruptcy filing, then contacting an experienced St. Petersburg bankruptcy attorney is your best option. Do not waste any more time.

Chapter 13 bankruptcy is a type of bankruptcy proceeding often referred to as the wage earner's plan. In a Chapter 13 proceeding, the debtor files a repayment plan in the bankruptcy court and makes payments according to the plan. Chapter 13 bankruptcy helps you pay off the debt in installments. If you are facing foreclosure, Chapter 13 will allow you to keep your home if you include the mortgage in your repayment plan. If you have a regular source of income, then Chapter 13 is your best option as it allows you to retain your assets unlike Chapter 7 where the bankruptcy court appoints a trustee who takes over and sells your non-exempt assets to pay off your debts.

An experienced Clearwater bankruptcy attorney can help you get a bankruptcy discharge. There are many attorneys in Florida but if you are located in Tampa Bay or Pinellas County, an experienced Clearwater bankruptcy attorney is your best option. Not all lawyers have the knowledge and skill required to get a bankruptcy discharge. You will need one that focuses bankruptcy. If you are based in Tampa and considering bankruptcy filing, you should consult an experienced Clearwater bankruptcy attorney.

Chapter 13 procedure is complex. A small error can cause your petition to be dismissed. Having an experienced Clearwater bankruptcy attorney assist you can be invaluable. You must file your Chapter 13 petition in the bankruptcy court. Your petition must be accompanied by the following documents:

  • List of assets and liabilities;
  • Details of current income and expenditures;
  • Details of unfulfilled unexpired leases and contracts;
  • Financial statement.

An experienced Clearwater bankruptcy attorney can help you prepare and file the petition along with the necessary documents. An automatic stay comes into operation immediately upon filing of a Chapter 13 petition in the bankruptcy court. Your creditors cannot take any further steps to collect the debts nor can they contact you.

Repayment Plan

You must submit a repayment plan along with the petition. If your repayment plan is not ready at the time of filing, you may file it within 15 days of the filing. If your repayment plan is still not ready, an experienced Clearwater bankruptcy attorney can request the bankruptcy court to extend the time. Your repayment plan will require you to contribute a portion of your future income to make the payments under the plan. The payments must start within 30 days of filing of the repayment plan. You will be making the payments directly to the bankruptcy trustee who will then distribute it amongst your creditors.

About 30 days after you file the petition, a creditors meeting will be held. At this meeting the creditors can object to your repayment plan. An experienced Clearwater bankruptcy attorney can draft your repayment plan and deal with the objections raised by the creditors. Generally creditors have 90 days from the date of filing of the Chapter 13 petition to file their claims. This period is extended to 180 days if the creditor is a government entity. Generally all Chapter 13 repayment plans require the payments to be made within 3 years. However in some case the bankruptcy court may allow the payments to be made within 5 years.

Cram Down Provision

An experienced Clearwater bankruptcy attorney will also advise you on the cram down provision of Chapter 13 bankruptcy and use it to your advantage. An experienced Florida bankruptcy lawyer will use the cram down provision to legally reduce the balance on a secured loan. Generally under Chapter 13 bankruptcy you can retain the collateral of a loan if your repayment plan provides for repayment of the loan or the market value of the collateral.

An experienced Clearwater bankruptcy lawyer can use this cram down provision to reduce or strip second mortgages in Florida. The cram down provision can also be used to reduce mortgages on investment and rental property but cannot be used to reduce the mortgage on principal residence. Using the cram down provision, the mortgage is split into two parts: secured and unsecured. The secured part is the part of the mortgage which is equal to the present value of the property. The part in excess of the present value of the property is the unsecured part. You will only need to pay the secured part in full. As for the unsecured part, an experienced Clearwater bankruptcy attorney can assist you discharge it by paying pennies for the dollar. This works well for debtors with second mortgages or mortgages on investment property. Cram down provision rules are complex and you will require the services of an experienced attorney.

If you are facing foreclosure in Tampa Bay or surrounding areas in Pinellas County and you have run out of options, then your best chance to prevent foreclosure is by filing for bankruptcy. You will require the services of an experienced St. Petersburg bankruptcy lawyer for this. Not all lawyers in St. Petersburg can assist you with bankruptcy. You will require the assistance of attorneys who concentrate on bankruptcy. Once a debt is discharged in bankruptcy, it can no longer be enforced against you.

Filing for a Florida Bankruptcy

An experienced St. Petersburg bankruptcy lawyer will review your circumstances and advise you on the right chapter to file. Generally individual debtors file for bankruptcy under Chapter 7 or Chapter 13. Chapter 7 is often referred to as liquidation. When you file a Chapter 7 petition, the bankruptcy court will appoint a bankruptcy trustee who will take over all your non-exempt assets and sell them to pay off your creditors; however, most of your debt will be exempt and protected. Based on your circumstances a certain amount of equity in your home may be exempt. Chapter 13 is often called the wage earner's plan. Chapter 13 involves the payment of the debts according to a repayment plan. If your mortgage is included in the repayment plan, you will be able to retain your home.

The bankruptcy petition must be accompanied with the following schedules:

  • Details of all your debts
  • Details of your income
  • List of your assets
  • Details of your monthly living expenses including food, housing, clothing, taxes, utilities, medicine, transportation, medicine, etc.

Your bankruptcy petition must be properly prepared and filed in the bankruptcy court. Even a small mistake can cause the petition to be dismissed. This will defeat the very purpose of filing. An experienced St. Petersburg bankruptcy lawyer knows how to prepare and file the bankruptcy petition. The lawyer will generally provide you with a standard question and answer form. Once you complete the form and return it, the attorney will prepare the petition based on your answers.

Immediately upon filing of the bankruptcy petition a stay will come into operation by law. This stay will prevent your creditors from taking further steps to collect the debt or contacting you. This means that your lender cannot take any further steps to foreclose on your home once you file for bankruptcy. Generally if you want to save your home from foreclosure, an experienced Florida bankruptcy attorney will advise you to file Chapter 13 bankruptcy. You must have a regular source of income for Chapter 13 filing as it involves making regular payments under a repayment plan. The repayment plan must be approved by the bankruptcy court. You must make the payments according to the plan to the bankruptcy trustee. The bankruptcy trustee will distribute the payments to the creditors.

Credit Score

While bankruptcy can help stop or delay foreclosure, it will have an impact on your credit score. Generally bankruptcy will reduce your credit score by 160 to 220 FICO points. So a person with a credit score of 600 before filing will see his or her credit score being reduced to 380 to 440 FICO points. However, an experienced St. Petersburg or Clearwater bankruptcy attorney will tell you that it is not as bad as you think it to be. Generally by the time you file for bankruptcy your credit score would have reduced by 100 FICO points as most creditors would have reported your defaults. Filing for bankruptcy will not make it worse.

Bankruptcy can have a positive effect on your credit score. When you come out of bankruptcy, the credit bureaus while determining your credit will compare you with others who are in a similar financial state - other bankruptcy filers. You will not be compared with person with excellent or good credit. If you are lucky, your credit score might even increase after bankruptcy. Once a debt is discharged in bankruptcy, the balance of the debt will appear as zero on your credit report. Foreclosure will also affect your credit likewise but it will not discharge your other debts.

Foreclosure process in Florida starts when you default on your monthly mortgage payments. Your lender will send you a letter informing you of your default and ask you to correct the default. If you do not correct the default and continue to default on the next month's payments, the lender will send you a notice of intent to foreclosure and ask you to pay the default amount within a specified period. If you still fail to pay the amount, then the lender will take steps to foreclose your home. The lender will take possession of your home and sell it by public auction to recover its dues. It can be frightening. However an experienced St. Petersburg bankruptcy lawyer can stop the foreclosure by filing for bankruptcy if you are located in the Tampa area.

If you are located in the Tampa Bay area of Pinellas County and you are considering filing bankruptcy, consult with an experienced Clearwater bankruptcy lawyer if you want the best advice on buying a car. There are many attorneys in Florida but you must contact someone who focuses in bankruptcy. Bankruptcy law is complex and only experienced bankruptcy lawyers can guide you through the complex maze of bankruptcy law in Florida. Bankruptcy allows you to legally discharge a debt. It can also be used to stop or delay foreclosure in Florida.

Before Filing

The first step in a bankruptcy proceeding is the filing of the petition in the bankruptcy court. In a Chapter 7 bankruptcy proceeding, you can claim certain assets as exempt assets. You can retain such exempt assets and the trustee appointed by the bankruptcy court cannot take over and sell such exempt assets. An experienced Clearwater bankruptcy lawyer can assist you claim exemption for your car. Florida bankruptcy law allows for exemptions of cars up to $1000. If your equity in the care is $1000 or less than you will be able to keep it without any problem. Your equity is the market value less any loans against the car. If your equity exceeds $1000, an experienced Clearwater bankruptcy lawyer can apply exemptions from other categories. If not, an experienced Clearwater bankruptcy lawyer can negotiate with the trustee and enable you to retain the car by paying the amount in excess of the exemption amount.

Talk to an experienced Clearwater bankruptcy attorney if you are located in the Tampa area if you intend to buy a car before filing for bankruptcy. If your car is an unsecured purchase made within 90 days before the filing, the bankruptcy trustee will question the purchase as it will be considered as an attempt to divert your funds. An experienced Clearwater bankruptcy lawyer may be able to convince the trustee and the creditors that it is a legitimate purchase and not made to divert the funds. If you have an older car that is debt free and cannot be exempt, then you may be able to trade it in for a newer car with careful planning with the help of an experienced bankruptcy lawyer. An experienced Clearwater bankruptcy lawyer will ensure that your purchase is properly planned and does not violate the law. However bankruptcy lawyers will never advise you to buy a new car because the law bars them from advising a bankruptcy filer to incur new debt.

During Bankruptcy Proceedings

If you do not have a car or you want to purchase one during the bankruptcy proceeding, an experienced Florida bankruptcy lawyer will advise you to wait until the creditors meeting is over. However getting finance for buying a car while you are in bankruptcy can be difficult. Even if you do manage to locate a lender, you will end up paying a high interest rate. There are lenders specializing in lending to people in bankruptcy. If the reason for your bankruptcy was sudden illness or something beyond your control, the lender may be willing to lend you the money. The lender will require you to explain how you intend to repay the loan.

After Bankruptcy

If you have obtained a discharge, then you can easily buy a car. There are no legal restrictions. Many people will tell you that once you come out of bankruptcy you will find it difficult to get credit as bankruptcy will remain on your credit for 10 years and your credit scores will be less. This is not necessarily the case. Talk to an experienced Clearwater or St. Petersburg bankruptcy attorney. He or she will explain how you can improve your credit. All lenders will consider your credit before providing credit.

An experienced Clearwater bankruptcy lawyer will tell you that there are lenders in Tampa who are willing to finance your car purchase and will advise you to look beyond the car dealer for finance since the dealer generally offers only its own limited range of loan products. There are lenders who focus on providing car loans for people who have just come out of bankruptcy. Such lender will offer you finance because they know that your unsecured is already reduced by bankruptcy and you have a lower debt to income ratio making it easier for you to meet future financial commitments. Lenders want to earn more by way of interest. Since you have just come out bankruptcy the lender can and will charge you more as interest. Lastly the loan is secured by your car which the lender can repossess in case of default.

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10.0Constance Denise Coleman