Chapter 7 Bankruptcy

Who can File: Individuals and Businesses

Best Suited for: Individuals with low to moderate income or the recently unemployed, with high credit card debt and/or medical bills. People facing a foreclosure who do NOT want to keep their home, or persons with a significant amount of business debt. Businesses seeking to shut their doors and terminate operations.

Pros: Generally less expensive and faster. No debt limit or long-term payment plans. Effective at eliminating unsecured debt (credit cards, deficiency from foreclosure, and medical bills).

Cons: Not available to high earners. Difficult to keep high-value non-exempt personal property (like paid-off vehicles, investment properties or expensive jewelry). Slows down but does not stop a foreclosure.

Time Line: In a basic individual case (non-business), discharge rendered about 4 months after filing, unless an objection is filed (rare). There is no discharge in business cases because the business is terminating operations. If the case has assets, the trustee may administer/liquidate those assets over several years. If the case has no assets, the case typically closes at the time of discharge.

Attorney Fee: $1,900 (basic consumer case) to $10,000 (complex/business case)
Filing Fee: $335
Expenses: $100
Financing Options: No, the fee must be paid in advance

Florida chapter 7 bankruptcy is available to individuals and businesses, and is called a “liquidation case.” Under Chapter 7 bankruptcy Florida laws, individuals are permitted to retain certain exempt property, such as retirement accounts and a homestead property. The remaining non-exempt property is “liquidated” to pay creditors. Liquidation occurs when a court-appointed trustee sells the property at auction, or more commonly, sells the property back to the debtor who filed the case. In the vast majority of consumer Chapter 7 cases, the debtor will have the opportunity to keep his or her property in exchange for a payment to the appointed trustee.

For more information, go to Bankruptcy FAQ