What is Chapter 7?

Filing for bankruptcy is a major decision with lasting future financial impacts. There are several different chapters of bankruptcy that you may file for. One is Chapter 7 bankruptcy. Chapter 7 Bankruptcy is commonly known as a liquidation bankruptcy. This allows for the sale or liquidation of your personal assets to repay your debts. Some of your assets may be protected, but not many. Chapter 7 Bankruptcy will not erase certain debts like child support, alimony or taxes. Chapter 7 bankruptcy is seen as giving the debtor a fresh start. Just who is eligible for Chapter 7 Bankruptcy?

There are certain criteria that must be met in order to file for chapter 7 bankruptcy. The first is an income criterion. Your income must be at or below your states median income. The median income for the state of Florida is $45,631. If you do not meet the income criteria there is a “means test” that weighs your income to your expenses. If you have money left over after your expenses are paid you are not eligible for Chapter 7 bankruptcy. You must also have attended mandatory credit counseling by an approved agency. There are also certain criteria that exclude you from being able to file for chapter 7 bankruptcies. One is having a chapter 7 bankruptcy debt discharged within the last eight years. Others include not attending credit counseling, attempting to defraud the bankruptcy court or your creditors or having a chapter 13 bankruptcy debt discharged wit in the last six years. In any case a consultation with a chapter 7 Bankruptcy Lawyer could prove invaluable.

The Miami area is facing an increase in the number of Chapter 7 bankruptcy filings. The Chapter 7 bankruptcy, new filings for the Miami area, during the year 2010 was 28,862 filings. The number of Chapter 7 Bankruptcy filings for the preceding year (2009) was 21,672 new filings. There were 2007 new Chapter 7 bankruptcies filed in January 2011 alone. The Federal court system expects the number to be even higher for 2011 but only time will tell. There are many driving factors for Chapter 7 Bankruptcy. The elevated foreclosure rate for the Miami area coupled with Florida’s higher than average unemployment rate surely account the increase in Chapter 7 Bankruptcy filings.

The increase in cases has created a back log for the court systems and plenty of business for Chapter 7 lawyers in and around the Miami area. There are a variety of bankruptcy chapters that you may be able to file under not just Chapter 7. Chapter 7 bankruptcies may not be for everyone or every situation but a Chapter 7 bankruptcy lawyer will be able to determine if this is the best option for you. Be sure to find either a Chapter 7 Law Firm or a Chapter 7 lawyer to ensure that they have experience in the particular area of law.


Chapter 7 Bankruptcy Rules Overview

Florida median income levels increase to $45,631

U.S. Bankruptcy Court Southern District of Florida

Bankruptcy Basics