At J&J Legal we understand that sometimes, individuals and businesses need a financial reset to eliminate crushing debt. We are here to provide the solve to your financial issues and help protect your assets. Chapter 7 Bankruptcy may be your best option for a financial “fresh start” and is available to individuals, partnerships, corporations, and other business entities. 11 U.S.C. § 109. As the most commonly filed bankruptcy, Chapter 7 allows an individual to discharge nearly every form of debt, including credit card debt, bank loans, medical bills, most court judgments, and deficiencies on repossessed vehicles. Some forms of debt, such as government guaranteed student loans and alimony, are non-dischargeable. To qualify for Chapter 7, you must meet certain income requirements.
The “Means Test”
Prior to filing, debtors must complete a “means test” designed to show the debtor’s income level and disposable income relative to other individuals in Florida. This test can be complex and the experienced attorneys at J&J Legal can assist you to determine your eligibility to file for Chapter 7 bankruptcy. Additionally, you must complete mandatory credit counseling prior to filing.
Chapter 7 Benefits
Under Chapter 7, what assets an individual will be able to keep varies based on a number of different factors. At J&J Legal, we can help determine which of your assets will be protected from liquidation. If you were domiciled in Florida for at least 730 days prior to filing for bankruptcy, Florida’s exemptions may allow you to keep your home, vehicle, and various personal items. Examples of property typically exempt from surrender in a Chapter 7 bankruptcy, include the following:
A) Homestead exemption: This allows a filer to exempt the value of his or her primary residence, so long as the filer has owned the property for at least 1,215 days prior to filing for bankruptcy.
B) Personal property exemption: This exemption allows a single filer to keep up to $1,000 worth of personal property, which includes furniture, art, and electronics. If spouses file for bankruptcy together, this exemption increases to $2,000. If a filer chooses not to claim the homestead exemption, he or she may exempt up to $4,000 of personal property.
C) Wages exemption: The head of a family’s wages are exempt up to $750 per week. This covers both paid and unpaid wages that have been deposited in a bank account within the last six months. The wages of someone other than the head of household may also be exempt, but to a lesser extent.
D) Alimony and child support exemptions: Alimony and child support that is reasonably necessary for the support of the filer and any of the filer’s dependents are exempt.
E) Savings accounts exemptions: In general, education savings, hurricane savings, prepaid medical savings and health savings accounts are exempt.
F) Pensions exemptions: ERISA-qualified retirement plans (such as 401(k)s, 403(b)s, profit sharing plans, and SIMPLE IRAs are completely exempt, as are benefits paid under the Florida Retirement System, State and County officers and employees retirement system, firefighter pensions, municipal police pensions, and teachers’ retirement benefits. Up to $1,171,650 from IRAs and Roth IRAs are exempt.
G) Public benefits exemptions: Unemployment benefits and/or reemployment assistance, local public assistance benefits, veterans benefits, and Social Security benefits are exempt. In addition, federal government employees’ pension payments that are necessary for the support of the filer and that were received three months prior to filing for bankruptcy are exempt.
H) Insurance exemptions: The proceeds of a life insurance policy made payable to a specific beneficiary are exempt, as is the cash surrender value of a life insurance policy and the proceeds of an annuity contract. Disability income benefits and fraternal society benefits are also exempt.
I) Miscellaneous exemptions: Workers’ compensation benefits and crime victims’ compensation benefits are exempt. Monetary damages paid to an employee for an injury or death that occurred while employed in a hazardous occupation are exempt.
Beyond keeping some of your property, there are additional benefits of a Chapter 7 bankruptcy—ending creditor harassment, clearing personal debt from your name, and stopping wage garnishment. Chapter 7 also offers opportunities to rebuild your credit faster than if you did not file.
If you are you being hounded by creditors and don’t know what to do, contact J&J Legal today for a free consultation. We offer confidential reviews of your situation and we can advise you regarding whether or not your debts qualify for Chapter 7 relief. At J&J Legal, our goal is to protect your assets and help you start a brand new financial life.