Bankruptcy
What is Chapter 7 Bankruptcy?
Written by Blake Stewart | Florida Bar No. 84716 | Admitted 2010 | Florida Bankruptcy & Estate Planning Attorney
The fastest and most common form of personal bankruptcy — a clean slate in as little as 90 days.
Chapter 7 Explained
Chapter 7 bankruptcy — sometimes called "liquidation bankruptcy" — is the most common form of personal bankruptcy filed in the United States. It allows individuals and families to discharge (legally eliminate) most unsecured debts, including credit card balances, medical bills, personal loans, and utility arrears.
The process typically takes 3 to 4 months from filing to discharge. Once your debts are discharged, creditors are permanently prohibited from attempting to collect those debts. The automatic stay — which goes into effect the moment you file — immediately stops wage garnishments, collection calls, lawsuits, and foreclosure proceedings.
What Debts Can Be Discharged?
- ✓ Credit card debt
- ✓ Medical and hospital bills
- ✓ Personal loans and payday loans
- ✓ Utility bills
- ✓ Lease obligations (in some cases)
- ✓ Certain older income tax debts
Florida's Powerful Exemptions
Florida is one of the most debtor-friendly states in the country when it comes to bankruptcy exemptions. You may be able to keep far more than you expect:
- ✓ Homestead exemption — unlimited value (for qualifying properties)
- ✓ Vehicle exemption — up to $1,000 (or $4,000 if no homestead claimed)
- ✓ Retirement accounts — 100% protected (IRAs, 401(k)s, pensions)
- ✓ Personal property — up to $1,000 (or $4,000 without homestead)
- ✓ Wages — head of household wage garnishment protections
Do You Qualify? The Means Test
To file Chapter 7, you must pass the "means test," which compares your income to Florida's median income. If your income is below the median, you automatically qualify. If it's above, additional calculations determine eligibility. Our attorneys will walk you through this analysis at your consultation — at no obligation.
Worth Reading
Why bankruptcy isn't failure — what the Founders actually builtBefore the Bill of Rights, the founders wrote bankruptcy into the Constitution on purpose. Blake Stewart on what the fresh start actually means.
Ready to Explore Chapter 7?
Call us at (321) 541-6845 or schedule a consultation online. Most new clients are seen within the week.