Chapter 7 is a process by which you can eliminate most of your debt (bills) while retaining certain exempt assets (your property).  Contact our office and an attorney will explain to you the "exempt" property that you will be able to retain.  The attorney will also explain to you the debts that you will be able to discharge in a Chapter 7 bankruptcy.  To qualify for a Chapter 7, the debtor must have an income that is less than the “median family income” as defined in 11 U.S.C. § 101(39A).  Individual or joint debtors must pass the "Means Test", a complicated mathematical formula designed to determine your disposable income after all bills are paid.  People who fail the "Means Test" have to file Chapter 13 bankruptcy.   A Chapter 7 is usually the best alternative for the debtor who does not own a home, is willing to give up his home, or owns a home but is current with the mortgage payments.  It is easiest to think of a Chapter 7 bankruptcy as a “liquidation proceeding”.  This means that you eliminate your dischargeable debts, however, any non-exempt property must be turned over to the trustee for liquidation and distribution to creditors.

Chapter 7

A Chapter 13 bankruptcy results in a plan to restructure your debt and repay your creditors over time.  For debtors that wish to save their homes from foreclosure or cars from repossession, Chapter 13 is usually their best option.  A debtor in a Chapter 13 typically will not receive a discharge until all the payments required by the Chapter 13 plan have been paid.  Just as the case in a Chapter 7, to file a Chapter 13 the debtor must reside in Florida.  The debtor must have a regular income, as defined in 11 U.S.C 109(a).  He or she must have unsecured debt amounting to less than $336,900 and secured debts of less than $1,010,650.  In addition, the debtor must not have been a debtor in a bankruptcy case within 180 days prior to filing the current bankruptcy case if due to the debtor’s willful failure to abide by orders of the court or to appear before the court the case was dismissed or the prior case was dismissed at the request of the debtor following the filing of a motion for relief from the automatic stay.

Chapter 13

Unfortunately, more families are facing financial hardship in Brevard County.   At Law Offices of Ashley Severance, PA, we are here to assist you in making those tough decisions that will affect your families’ economic future.