Tampa Chapter 7 Bankruptcy Attorney 813-222-8210
Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy is a liquidation of assets, but normally no assets leave the Debtors hands. In theory you must immediately turnover to the bankruptcy estate all assets that are not covered under the allowed exemptions (what you are allowed to keep under the Bankruptcy Code), unless you purchase the assets from the bankruptcy trustee. Most people do not have assets outside of the exemption level, but you must seriously and truthfully review your assets with your Tampa Bankruptcy Attorney before filing a chapter 7 bankruptcy. About 19 out of 20 cases under Chapter 7 Bankruptcy are considered no-asset cases and do not call for the surrender of assets. This is to say that the vast majority of people under Chapter 7 of the Bankruptcy Code do not pay anything to their creditors.
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The key to a smooth and successful Chapter 7 Bankruptcy is truthful and proper disclosure of assets, debts, income and expenses. In addition when the case if filed, you will be expected to provide the trustee your last three months of bank statements, 7 months of pay stubs or proof of income and two tax returns. Some bankruptcy trustees may also request copies of titles to cars, or pay off statements, deeds to property or insurance information. All of this is done to check that your asset disclosure was accurate and truthful. Having these items ready in the start of a case helps your bankruptcy lawyer to assure that your case can be discharged and closed quickly so you can begin your debt free fresh start.
How Chapter 7 Bankruptcy Works:
The focus of Chapter 7 Bankruptcy is called Liquidation Analysis
. Under Liquidation Analysis, once the Bankruptcy is filed, the Bankruptcy Court creates a Bankruptcy Estate. The Bankruptcy Estate is comprised of all of the Debtor’ assets and liabilities. Immediately after filing, certain assets are exempted out of the Bankruptcy Estate and are returned to the Debtor. The exempt assets may include but are not limited to Home Equity, A Car up to $1,000 per person, retirement accounts and prepaid college accounts, and other personal assets ranging from $1,000-$5,000 per person.
Since most people do not have assets above and beyond the exempt assets most items are immediately exempted out of the Bankruptcy Estate and back to the Debtor. It is important to note that Assets typically do not change hands and most of this is just a legal process and not an actual exchange of assets.
Typically most cases result in a discharge of debt without any contribution or payment from the Debtor. If a payment is necessary it is the Debtor’s choice to make a payment or surrender the assets. The typical Chapter 7 Bankruptcy case is closed and discharged in 4 months.
Note that your tax return may be part of the Bankruptcy estate and may belong to the bankruptcy trustee. It is best to discuss asset with your bankruptcy counsel early in the process so he may help you consider all of your assets. Once your case is filed it may be too late to turn back or withdraw the case and you may loose your assets if you do not account and disclose your assets accordingly.
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Galewski Law Group, P.A.
1112 E. Kennedy Blvd
Tampa, FL 33602
Local: (813) 222-8210
Fax: (813) 222-8211
Did you know:
Tampa Bankruptcy Attorney – There is life after bankruptcy
There is life after bankruptcy. There is good credit, new credit cards and lines of credit, home loans and car loans after bankruptcy. Generally, credit reporting bureaus use three factors to create 90 percent of your score. your immediate payment history, your debt to credit limit and your debt to income ratio. The remaining ten percent of your score comes from smaller items such as having to many inquiries in a 6 month period.
Most people on the eve of bankruptcy do not have the greatest immediate payment history. Filing a bankruptcy can help improve this area over time. Instantly it is another bad mark, but that mark begins to age almost immediately and is almost a non issue in 12-24 months. Without the bankruptcy you will keep having other bad marks hit your score until you get your credit under control.
Your Debt to credit limit ratio is the amount that you owe compared to what you could possibly owe. Anything over 20% is bad. That is if you have $10,000 of total available credit card space and you owe more than $2,000 you are hurting your credit score. Most people, even those not considering a bankruptcy, seem to be above this mark. After a bankruptcy you will have no credit card debt and this will be a positive mark on your credit score.
Your debt to income ratio is the amount that you owe compared to what you make. Again anything over 20% is not good. That is if you make $100,000 per year but owe more than $20,000 you are hurting your score. Again most people, even those not considering bankruptcy are past this point today. Most people considering bankruptcy are over 25%. After a bankruptcy there would be no debt and this would be a positive factor in your score.
For these reasons and other most clients report that they are in the 650-720 range within 12 months of a chapter 7. FHA used to allow people to refinance out of a chapter 13 after 12 payments into the plan. Due to the market crash FHA now requires you to be 24 months removed from the bankruptcy for a loan. Other loans are available often at less then 9.9% for new homes. Credit cards will send you unsolicited offers and car dealers will often give you loans the day after a chapter 7 discharge.
There is life after bankruptcy.
The Galewski Law Group provides Accident, Insurance Claim, Injury, Chapter 7, Chapter 11 and Chapter 13 bankruptcy, foreclosure defense, mortgage modification, Divorce, and Personal Injury representation to clients throughout the Tampa Bay Area including Hillsborough, Pinellas, Manatee, Pasco, Polk, Sarasota and Hardee County and in cities that include Tampa, Clearwater, Dover, Seffner, Tarpon Springs, St. Petersburg, Palm Harbor, Dunedin, Safety Harbor, Lutz, Holiday,, Oldsmar, Sarasota, Crystal Beach, Bradenton, Lakeland, Brandon, Plant City, New Port Richey, Trinity, Spring Hill, Port Richey, Largo, Seminole, Pinellas Park, and Bartow.
1112 E. Kennedy Blvd. * Tampa, FL 33602 * T 813.222.8210 * F 813.222.8211