Jacksonville Bankruptcy Lawyer

Many events can lead to financial hardship for consumers and businesses. As much as we might try to meet all of our monetary obligations, we sometimes find that doing so becomes impossible. The realization that you cannot pay your bills can be frightening. Bankruptcy provides a way to start over and avoid drowning in debt.

No one should take filing for bankruptcy lightly, but for many people, it is the best way to get control over their finances and move forward. If you are struggling to make credit card payments, cover medical bills, pay vendors for business expenses, or otherwise find yourself incapable of covering your debts, you should learn about your right to file bankruptcy. While filing for bankruptcy might seem intimidating or confusing, a Jacksonville, Florida bankruptcy lawyer can help you through the process.

Call the Law Offices of Carol M. Galloway today at 904-694-5489 to speak to a dedicated and compassionate Jacksonville bankruptcy lawyer.

How Does Filing for Bankruptcy Help?

One of the most helpful parts of filing for bankruptcy is that a person can discharge many of their personal debts. At the completion of the process, the debtor can start moving toward better financial health. In some scenarios, filing for bankruptcy can also prevent home foreclosures or repossessions of cars or other property.

A person who files for bankruptcy can seek protections against having utilities turned off, stop creditor harassment, and stop debtors from garnishing a person’s wages. Filing Chapter 13 can also mean lowering payments on some of a person’s non-dischargeable debts.

For people struggling with high amounts of debt, bankruptcy can feel like a brand-new start. While there are limitations on what debts you can discharge, the benefits are often more than enough to help a struggling person get back on track and move forward with their life.

Eligibility for Filing Chapter 7 Bankruptcy

When a person files for Chapter 7 bankruptcy, they are looking to discharge or liquidate most of their debts. A person looking to file Chapter 7 bankruptcy has to meet legal qualifications, including a means test.

The means test serves to make it more challenging for high-earners to file for bankruptcy. For higher-earning individuals to file for Chapter 7 bankruptcy, they must fill out forms indicating their current monthly income and expenses. A Means Test formula will indicate whether the individual qualifies for a Chapter 7 bankruptcy. The idea is that higher earners might have the ability to pay their debts and shouldn’t be entitled to a complete discharge of all their debts. There are several forms of bankruptcy, though, so anyone who suspects that they do not qualify for a Chapter 7 bankruptcy should still consider consulting with a Jacksonville bankruptcy attorney about their legal rights.

Chapter 13 Bankruptcy in Jacksonville, Florida

Chapter 13 bankruptcy lets a person restructure and develop plans to pay creditors comfortably over a three or five-year period. The court will review the plan for debt repayment and determine whether or not it is feasible. If the court approves the plan, then the debtor must stay on track with the restructured payments. Creditors included in the bankruptcy plan cannot take legal actions against the debtor as long as the person complies with the agreed payments. Any debts remaining after completing the plan can be discharged.

Debts You Cannot Discharge

While bankruptcy is a useful process for eliminating many forms of debt, legal limitations prevent people from liquidating all debts. One of the most well-known limitations is that a debtor cannot discharge their student loans without proving undue hardship. The inability to discharge student loans is frustrating for many people who are making payments on tens or even hundreds of thousands of dollars in student loan debts. However, for some of these individuals, bankruptcy can eliminate other forms of debt, relieving some of the pressure and making those student loan payments slightly less painful. Also, courts have started taking a second look at the “undue hardship” limitation, and obtaining relief from student loan debt is becoming less burdensome than it used to be. Another option is to mediate student loan debts while in bankruptcy which may reduce the monthly payments.

There are other forms of debt that a person might not be able to discharge, including back taxes, child support, and criminal fines. The bankruptcy might also not protect someone who co-signs on a loan with the person filing for bankruptcy. Thus, if you took out a private loan and your brother co-signed, your brother might have to repay that loan or at least part of the loan. If you are contemplating filing for bankruptcy, you should speak to an attorney about what debt you can and cannot discharge to gain a complete understanding of how bankruptcy can help.

Bankruptcy and Businesses

An individual who owns a small business might also need to file for bankruptcy for that business. Sometimes, especially with partnerships and sole proprietors, the owner must file for bankruptcy as an individual and not on the part of the business. The reason for this is that the individual is responsible for business debts in these companies.

In other organizations, the business can file without the individual filing. There are certain differences in how a business and personal bankruptcy proceeds, making it important for a person to understand their rights and obligations. Bankruptcy is a smart solution for a company going out of business since it allows them to wind down without getting sued by creditors for business debts.

Florida Bankruptcy FAQ

What is the general process for filing a proof of claim in a bankruptcy proceeding?

A Proof of Claim is generally filed by a Creditor. The Creditor will certify to the court the amount of the debt owed by the Debtor. A creditor will attach a detailed report which reflects the breakdown of the money owed by the Debtor.

What relief can bankruptcy provide?

Bankruptcy can provide relief from both secured and unsecured debts.Some examples of unsecured debt are medical bills, credit cards and repossessions. Some examples of secured debt are mortgages; vehicle financing and secured loans such as second mortgages (HELOC) In a chapter 7, all unsecured debt, other than student loan debt, is discharged. This means the debt is no longer owed by the Debtor. In a chapter 13, the Debtor may be required to pay a pro rata share of their unsecured debt which is contingent upon factors such as income and assets. In both chapter 7 and chapter 13, a Debtor may discharge secured debt such as mortgage and vehicle debt. In general, IRS debt is generally non- dischargeable with exceptions related to criteria such as the type of debt, whether the return was filed timely and the year the debt was due.

How is bankruptcy enforced?

Once a bankruptcy is filed, the Debtor, or party who files the bankruptcy, is protected by the federal court. If a creditor does not abide by the rules set forth in the bankruptcy code, there may be sanctions brought by the debtor which are enforced by the federal bankruptcy court.

How long does the bankruptcy process generally take?

Chapter 7 generally takes 120 days from filing to discharge. Chapter 13 is generally 36 to 60 months.

Is there a limit to how many times a person can file bankruptcy?

After discharge, Chapter 7 may be filed once every 8 years from the date of filing. A Chapter 13 can be filed at any time but restrictions or limits as to discharge and automatic stay provisions apply depending on how many times a case has been filed by the Debtor.

How do I file for bankruptcy?

An individual can file pro se meaning filing without an attorney. However, bankruptcy laws are complicated and are best dealt with by an experienced attorney.

How long does a Chapter 13 bankruptcy generally last?

Chapter 13 generally lasts for 36 to 60 months.

How long is the Chapter 7 bankruptcy process generally?

Chapter 7 generally takes 120 days from the date of filing.

What assets are generally liquidated in personal bankruptcy?

In chapter 7, assets that are not protected or exceed the limits of the allowable exemptions in your State may be liquidated. Exemptions refer to protected property including but not limited to equity in real property (i.e. land, house); vehicles; boats; household goods and belongings; cash/ bank deposits; personal property settlements; and claims against third parties. To avoid liquidation, a Debtor may choose to do a “buy back” of the value of such items, if applicable. Another option would be to file a chapter 13 and pay the unsecured creditors the value of the property that would be liquidated in a chapter 7.

What are the general steps to take when a creditor files for Chapter 7 bankruptcy?

A creditor is defined as a party or entity to whom you owe money. If a creditor files for chapter 7 bankruptcy, you as a borrower should receive Notice from the court of the creditor’s bankruptcy filing. Depending upon how much you owe the creditor, you may be contacted by the chapter 7 bankruptcy Trustee. Depending upon the circumstances, you may want to consult with an experienced attorney to discuss your rights.

How long does it generally take for a person’s credit score to improve after bankruptcy?

Credit generally improves within 12 months of filing.

What is Chapter 7 bankruptcy?

Chapter 7 generally eliminates or discharges unsecured debt such as credit cards, medical bills, and unsecured loans. Chapter 7 stops garnishments and repossessions. In general, the Debtor will not pay back any money to the unsecured creditors unless there are issues regarding unprotected assets, preferential payments or transfers of property.

What is Chapter 13 bankruptcy?

Chapter 13 is a repayment plan that lasts from 36 to 60 months based upon many factors such as income and assets. While in a Chapter 13, a Debtor has a plan payment which includes debts such as mortgage, vehicle, and IRS debt and a pro rata distribution which could be as low as 0% to unsecured creditors to 100% to unsecured creditors depending upon factors such as income, assets, preferential payments and transfers of property. IRS debt, Real Property Taxes and student loan debt can be paid through a chapter 13. Chapter 13 stops foreclosure; judgments and repossessions.

Will bankruptcy eliminate all my debts?

Bankruptcy will not eliminate student loan debt, child support or alimony, most IRS debt (criteria apply); and any debt incurred as the result of fraud and/or criminal activity.

What are the differences between Chapter 7 and Chapter 13 bankruptcy?

In general, chapter 7 is a “quick bankruptcy” whereby discharge takes place after 120 days of filing. To file chapter 7, a debtor/debtors’ income must meet certain criteria such as under median income, and exempt or “protected” assets.
In general, a Chapter 13 is filed when income is above median, the Debtor has assets that need to be protected and/or to stop a foreclosure sale, or repossession. A Chapter 13 is generally active for 36 to 60 months before discharge.

What is lien stripping?

Lien Stripping is a process where a Lien such as a second mortgage is “stripped” or discharged in a chapter 13 Adversary proceeding.

Hiring a Jacksonville, Florida Bankruptcy Lawyer

Hiring an attorney to represent you in a Jacksonville bankruptcy case ensures that someone is advocating for you throughout the process. If you wonder whether you should file for bankruptcy, a good first step is to speak with an attorney. Waiting to speak to a bankruptcy lawyer can place your assets in jeopardy. While you might be able to prevent foreclosures and other consequences by filing for bankruptcy, your options shrink if you wait until creditors initiate lawsuits or secure judgments against you. Call the Law Offices of Carol M. Galloway at 904-694-5489 to speak to an experienced Jacksonville bankruptcy lawyer today.

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