Step 1: Assess Your Financial Condition
Bankruptcy gives you a second chance when things get tough. When you have exhausted all other means, then you might want to consider bankruptcy. Most individuals file for bankruptcy under Chapter 7 or Chapter 13.
- Chapter 7: Wipes out most debts in a few months but may force you to forfeit non-exempt property.
- Chapter 13: A plan for paying your debts over three to five years. Often, individuals use this type of bankruptcy to catch up on their mortgages.
Most people file under Chapter 7, provided they can qualify. That’s faster debt relief.
Step 2: Establish Eligibility
For bankruptcy, you have to demonstrate economic distress:
- Chapter 7: Show that your income is at or below the median of Florida’s by your family size, or you have passed the means test.
- Chapter 13: Ensure your income is sufficient to repay creditors, your debts are within legal limits, and your tax filings are up to date for the past four years.
Step 3: Complete Credit Counseling
Within six months of filing, attend a credit counseling session. This 90-minute course can be done online or in person and costs $0–$100. You’ll receive a certificate of completion to include in your petition.
Step 4: Organize Your Paperwork
Gather comprehensive documentation of your debts, income, assets, and expenses. Do it accurately and comprehensively. If you need help, consult a professional.
Step 5: File Your Petition
File your bankruptcy petition in the correct Florida district court. Pay the filing fees unless you qualify for an exemption or installment plan.
Step 6: Attend the Creditors’ Meeting
In the 341 hearing, a trustee will review your case and might have some questions for you. Be sure to come with necessary documents like your tax returns, pay stubs, and bank statements.
Step 7: Attend a Debt Management Course
Complete a post-filing financial education course within 45 days after the creditors’ meeting so that the case should not be dismissed.
Step 8: Wait for Discharge
When you complete all requirements, the court will then write off all the debts qualified, providing you with an economic reset.
Step 9: Rebuild Your Financial Future
After bankruptcy, focus on rebuilding credit and managing finances. Avoid paying discharged debts and consult your attorney for any lingering concerns.
By following these steps, you can navigate the bankruptcy process and start anew.
This post was written by Trey Wright, an experienced bankruptcy lawyer Jacksonville FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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