Bankruptcy

If you are overburdened with debt because of past due mortgage payments, unsecured loans, high medical bills, or credit card debt, filing for bankruptcy may be your key to obtaining financial relief. One of the primary purposes of bankruptcy is to discharge certain debts in order to give an honest individual debtor a fresh start. Filing bankruptcy immediately stops all creditors from seeking to collect debts from you, and stops any foreclosure proceedings you may be involved in.

We understand that filing for bankruptcy can be nerve-racking, but we are here to make the process easy for you by guiding you through the entire process and helping you reach financial stability.

CHAPTER 7

Chapter 7 bankruptcy wipes out your debts and you get a "Fresh Start". Chapter 7 bankruptcy is a liquidation, where the trustee collects all of your assets and sells any assets that are not exempt (see Florida Exemptions). The net proceeds of the liquidation are then distributed to your creditors, with a commission taken by the trustee overseeing the distribution.

You may choose to keep certain secured debts, such as your car or house, by reaffirming those debts. When you reaffirm a debt, you will still owe that debt and must continue to pay it just as you were before you filed the bankruptcy. If you would like to reaffirm a debt on an account that is not current, you must make the back payments that are due in order to reaffirm that debt.

Certain debts such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged, cannot be discharged in a Chapter 7 bankruptcy (see Florida Exemptions). A typical Chapter 7 bankruptcy usually consists of large credit card debt, unsecured bills, coupled with few assets. In the vast majority of cases, this type of bankruptcy is able to completely eliminate all of the filer’s debts.


CHAPTER 13

Chapter 13 bankruptcy is reorganization. Under a Chapter 13 bankruptcy, a debtor proposes a 3-5 year repayment plan to the creditors offering to pay off all or part of the debts from the debtor's future income. If the debtor can stick to the terms of the repayment plan, all remaining dischargeable debt will be released at the end of the plan.

Chapter 13 bankruptcy is generally used when a debtor wants to keep secured assets, such as a home or car, or when he or she has more equity in the secured assets than is protected by the Florida bankruptcy exemptions. Many debtors use Chapter 13 to prevent a house foreclosure, make up missed car or mortgage payments, pay back taxes, stop interest from accruing on their tax debt (local, Florida state, or federal), etcetera. When a debtor has valuable nonexempt property and wants to keep it, a chapter 13 may be a better option

To file Chapter 13 bankruptcy you must have a "regular source of income" and have some disposable income to apply towards your Chapter 13 payment plan. The amount to be repaid is determined by several factors, including the debtor's disposable income. A chapter 13 bankruptcy allows debtors to make up their overdue payments over time and reinstate the original agreements.


LOSS MITIGATION MEDIATION (LMM)

This program is designed to function as a forum for eligible Debtors to explore loss mitigation options with their lenders for real property in which the Debtors have an interest and are obligated on the promissory note or mortgage. The goal of LMM is to facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a feasible and beneficial agreement with the assistance and supervision of the United States Bankruptcy Court for the Southern District of Florida. Loss mitigation options include modification of a mortgage or surrender of real property owned by an individual Debtor(s).

Individuals who have filed for bankruptcy protection under or converted to Chapters 7 or 13 are eligible to participate in LMM, with respect to not more than four units of real property, as follows:

  • Chapter 7 :
  • An individual Debtor may request LMM to surrender any real property in which the Debtor holds an interest.
  • Chapter 13 :
  • An individual Debtor may request LMM to modify a mortgage or surrender any real property in which the Debtor holds an interest.

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