BANKRUPTCY BASICS

Florida Bankruptcy Basics

Chapter 7 Bankruptcy begins when you file a bankruptcy petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets.

Why is bankruptcy a bad word?

Bankruptcy seems complicated so it scares off a lot of people. However, it is not as complicated as it seems. While there are many rules and regulations that can be confusing without proper guidance and representation, many of bankruptcy’s basic concepts are simple and make sense. Most people hear nothing but the negatives of bankruptcy. This is information is usually pushed onto the public by banks and credit card companies that want people to believe that bankruptcy is bad for you. Keep in mind that when you file a bankruptcy it is these same banks and credit card companies that stand to lose the most. Therefore, they lie about and exaggerate the negative aspects of bankruptcy to scare you away. Don’t believe the lies.

Bankruptcy is basically a set of laws designed to help people with too much debt get off the sidelines and back onto the field as it pertains to our economy. It is not only in the best interest of each person in bad financial shape to consider bankruptcy, but it is also in the best interest of our economy.

Keep reading to get an idea of some basic questions we will ask you during your free consultation.

Chapter 7 bankruptcy debt liquidation: In a nutshell

During your free consultation we will ask you the following:

  1. How much credit card debt do you have?
  2. Do you want to save a home or car or other asset?
  3. How much money do you make?
  4. Do you have savings, stocks or free and clear land? If you do then you will have to turn over any nonexempt savings to the bankruptcy court. This means anything more than $1,000 to $2,000 will either go to the bankruptcy court or you will be forced to compensate the bankruptcy court.
  5. Do you have a 401(k) or IRA?
  6. Do you have equity in your homestead?

Chapter 7 bankruptcy is usually preferred by those carrying too much credit card debt. for you. Chapter 7 bankruptcy eliminates your debt without requiring you to make payments to your creditor. As you already know, paying off credit cards is very difficult if not impossible. If can only afford to pay the minimum balance then it will take decades to pay off those credit cards. If you continue to use those credit cards then it will take even longer.

Chapter 13 bankruptcy reorganization: In a nutshell

During your free consultation we will ask you the following:

  1. Do you want to save your home, investments or other assets?
  2. Do you have two mortgages?
  3. Are you behind on your mortgage payments?
  4. How much money do you make?

If you are considering hiring a bankruptcy attorney make sure he or she has experience in bankruptcy court and make sure he or she does not also represent creditors and banks. Unfortunately, we often find that many bankruptcy attorneys who represent consumers in court on Monday and then represent the banks on Tuesday. At Stamatakis + Thalji + Bonanno, we LOVE our job as Florida’s bankruptcy attorneys.

As you see, the bankruptcy process is very complicated and provided numerous challenges to consumers not represented by experienced attorneys. Contact Stamatakis + Thalji + Bonanno today for your free consultation.

Does bankruptcy ruin my credit?

No. In all of your years as practicing bankruptcy attorneys we have never filed a bankruptcy for a person with a great credit score. Typically people call us when they are already drowning in debt, behind on mortgage and credit card payments, and already facing a severely declining credit score. In this situation bankruptcy works to eliminate debt, stop the on-going late payment history and in many instances help jump start on-time mortgage payments. Often times, our clients experience substantial improvement in their credit score within 12-18 months after filing their bankruptcy. If you are in severe debt you will not be able to improve your credit score in the short term or long term without either paying off all of your debt or filing a bankruptcy.

Chapter 11 bankruptcy business reorganization: In a nutshell

The Chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11.)

Background

A bankruptcy case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy.

An individual cannot file a Chapter 11 bankruptcy or any other bankruptcy chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the bankruptcy court or comply with orders of the court, or if the debtor was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d)-(e). In addition, no individual may be a debtor under Chapter 11 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved bankruptcy credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

How Chapter 11 bankruptcy works

A Chapter 11 bankruptcy case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. A petition may be a voluntary petition, which is filed by the debtor, or it may be an involuntary petition, which is filed by creditors that meet certain requirements. 11 U.S.C. §§ 301, 303. A voluntary bankruptcy petition must adhere to the format of form 1 of the official forms prescribed by the Judicial Conference of the United States. Unless the court orders otherwise, the debtor also must file with the court: (1) schedules of assets and liabilities (2) a schedule of current income and expenditures (3) a schedule of executory contracts and unexpired leases (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). If the debtor is an individual (or husband and wife), there are additional document filing requirements. Such debtors must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. 11 U.S.C. § 521. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a).

Talk to an Experienced Tampa Bankruptcy Lawyer

President Obama and the U.S. Congress has designated our law firm a Federal Debt Relief Agency because we help people file for bankruptcy. See our frequently asked questions and bankruptcy timeline pages for more background about the pros, cons and applications of bankruptcy. To discuss your specific circumstances, how bankruptcy may help your situation and all the ways Stamatakis + Thalji + Bonanno can help, call us at 866-479-6946 or contact us online.