Diaz & Associates

Miami Bankruptcy Attorney

There are several chapters under which you can file for bankruptcy in a United States Bankruptcy Court. The two most common are Chapter 7 and Chapter 13. Last year in the Florida Middle District of the United States Bankruptcy Courts approximately 75% were Chapter 7, and 24% were Chapter 13 filings. Chapter 11 used by businesses and individuals whose debts are very large, and Chapter 12 for family farmers amounted to 1%.

The intent of this page is to explain some of the issues involved in a Chapter 7 bankruptcy case. A Miami Chapter 7 Bankruptcy Lawyer can help you make the decision to file and if so whether it should be for Chapter 7 or Chapter 13.

Because the Bankruptcy Code combines both federal and state laws, it can be complicated. The items listed below will provide the reader an overview of the major components of a Chapter 7 Bankruptcy case. It is advisable that you contact a Miami Chapter 7 Bankruptcy Lawyers who will more fully explain and elaborate on any bankruptcy issues.

Qualifying for a Chapter 7 Bankruptcy

  • Mean income test - The Court will compare your average income for the six months prior to your filing to the medium income for the state of Florida. Provided your income is less than the median, you may elect a Chapter 7 filing.
  • Exceed the monthly income test? - If you exceed the median income, other portions of the means test will be examined to see if you are still eligible for a Chapter 7 filing. If you have a lot of expenses, such as a high mortgage, you still may be able qualified for a Chapter 7 filing. The completion of Official Form 22A, which takes into account a multitude of factors is the method used to determine qualification.
  • Credit counseling - You, within 180 days before filing, must receive credit counseling from an approved credit counseling agency.
  • Eligibility - Individuals, partnerships, corporations and other business entities are eligible.

Chapter 7 Process

Chapter 7, entitled Liquidation, provides a court supervised procedure by which a court appointed trustee assumes control of the non-exempt assets, liquidates them and makes a distribution of the proceeds to the creditors. Once that has been done your debts will be excused, with some notable exceptions such as:

  • Child support or alimony, fines and some taxes
  • Debts and not listed in your bankruptcy petition
  • Loans you receive by knowingly giving false information to the creditor
  • Debts which are a result of "willful and malicious" harm
  • Student loans, unless court decides that it would be an undue hardship for you to repay it
  • Fines and other government penalties
  • Debts which are the result of the purchase of luxury goods

Florida Exemptions

  • Homestead - Properties of 1/2 acre or less within a municipality and properties up to hundred and 60 acres outside a municipality. If the residence was purchased 40 or more months prior to the filing there is no limit on the amount of the exemption. If it was purchased within 40 months you are entitled to $137,000 per person.
  • Florida Statutory Exemptions - Includes pensions, 401K plans are tax-deferred retirement plans, Social Security, disability, IRAs, annuities life insurance cash value, tuition investment plans, health saving accounts, and hurricane savings accounts.
  • Automobile - $1000 of equity in one automobile. $2000 is owned jointly. If your car has no equity (the value of the car is less than the amount owed) you can retain the vehicle provided you keep your car payment current.
  • Miscellaneous - Other miscellaneous personal property including a clothes, tools, furniture, and cash on hand to value of $1000 or $2000 for a joint filing. A value of your personal property is its current fair market price.
  • Wildcard - If you do not own a home or do not claim it as an exempt Homestead you may claim a $4000 wildcard exemption. If your mortgage is greater than the value of your home this may be an avenue to pursue.

Deciding if a bankruptcy is the right option for you is a very important to you and your future. Contact a Daytona Beach Chapter 7 Bankruptcy Lawyer, who will help you decide and guide you through the entire process.

Chapter 13

Chapter 13 of the US Bankruptcy Code is appropriately titled "Adjustment of Debts of an Individual With Regular Income". As the title implies, it was conceived to allow a debtor, who has a regular source of income, to develop a plan which would allow him to pay off his debts while maintaining a valuable asset such as is home.

All of your existing debts are consolidated in a court controlled repayment plan. You will make monthly payments to the trustee who was appointed by the court. Your creditors get paid as per your approved Chapter 13 Plan. In the process, the court can force your creditors to accept terms to allow you to pay off your debts. Under this type of bankruptcy you retain all of your assets including your home and cars.

As part of the process you will have to document your monthly expenses so that your Miami Chapter 13 Bankruptcy Lawyer can prepare the proper schedule which will be submitted and approved by the court. Repayment schedules are normally three to a maximum of five years.

The court papers that have to be completed separate unsecured debts from secure debts. It is therefore important that you know the difference between the two.

Unsecured Debts - Include any personal loans or credit cards. If your unsecured debts are in excess of $337,000 you cannot file for Chapter 13.

  • Secured Debts - Include those debts where there is a security interest to guarantee payment. Examples include mortgages, car loans and loans from finance companies where the object you bought is considered security. Store goods purchase using a store credit card usually means they have a security interest in your purchases.

Income and Expenses Statement must be as accurate as possible. The regulations require that all of your disposable income is paid into the Chapter 13 Plan. Disposable income is defined as the amount left over at the end of the month after paying reasonable expenses. Listing luxury items may result in the Trustee requiring that these items be sold and the proceeds used to pay your creditors. In addition the trustee will require you to submit your income tax returns for the plan period to verify the amount of your disposable income is and to demonstrate that the entire amount is being paid into the plan.

A Chapter 13 filing may be appropriate for you. Contact a Miami Bankruptcy Lawyer, who will evaluate the particulars of your case and help you decide how you should proceed.



Diaz & Associates P. A.
9370 Sunset Drive
Suite A-110
Miami, FL 33173
(305) 598-1800 Local
(877) 404-6487 Toll Free







We also have a New Jersey Loan Modification Attorney available in our Mt. Laurel office for New Jersey residents, and a New York Loan Modification Attorney for our New York City clients.