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Fort Lauderdale Office

David D Nielson, Attorney at Law

 

 

Chapter 7 Bankruptcy

Chapter 7 of the Bankruptcy Code provides a fresh start for individuals and businesses, generally by erasing most unsecured debts like credit card debts, and allowing you to keep property such as your house if you're current on the mortgage payments, and other property.

Chapter 7 is a type of bankruptcy that is designed for individuals, corporations or other entities who are unable to pay their current debts and seek to discharge those debts. The advantages of Chapter 7 usually include:

  • Discharging (removing) your unsecured debt, such as credit cards, personal loans and deficiencies from foreclosed homes or repossessed cars
  • Stopping lawsuits and annoying calls from collection agencies
  • Keeping your home and car, as long as you are current on your payments
  • Discharging certain old income tax debt
  • Giving you a fresh start on your financial life within a few months

Competent, Compassionate Advice

The only way to be sure of your options is to call us at 954-530-7397 for a free consultation in our Fort Lauderdale. The attorney Nielson has years of experience helping individuals and companies take full advantage of their debt relief options.

Answers to some frequently asked questions:

I have heard that the bankruptcy laws have changed, and so people can longer eliminate their debt. Is that true?
While it is true that, in 2005, the Bankruptcy Code was changed, making it more difficult for individuals to walk away from their debt, that change did not affect everyone. Now, individuals (married or unmarried) who make over a certain amount of money, may have to consider a Chapter 13 bankruptcy, where they repay at least some of their debt (See our Chapter 13 web page). But for most people, Chapter 7 is still available.

Will I lose my house in a Chapter 7?
That depends. If you are current on your mortgage payments and have properly filed a declaration of homestead, you are not likely to lose your house in a Chapter 7. As long as you remain current with your payments, except in rare circumstances, you should be able to keep your house. If you are behind on your mortgage payments, you may have to consider a Chapter 13.

How about the rest of my belongings? Will I lose them?
In a Chapter 7, individuals are generally permitted to keep most of their belongings by taking advantage of the exemptions provided in bankruptcy. There are bankruptcy exemptions that can be used for cars and personal belongs upto a certain maximum values. Also, IRAs, 401(k) plans and other pensions are generally safe.

Can I reduce my mortgage or eliminate a second mortgage in Chapter 7? How about real estate attachments and executions?
A Chapter 7 will not affect the principal amount of any of your mortgage. If you have a second mortgage, you may be able to eliminate it in Chapter 13, but not in Chapter 7. However, you can remove certain real estate attachments or court executions on your home if they stand in the way of your homestead exemption.

Should my corporation file Chapter 7?
This is a difficult question, and one on which many lawyers disagree. Under certain circumstances, when you are closing your business, you may not need to file a Chapter 7. However, there are certain times when filing a Chapter 7 is recommended. This must be determined on a case by case basis. Further, if you granted a personal guarantee on the debt for the business, you may need a personal bankruptcy to discharge the personal guarantee.

Can I discharge overdue taxes in a Chapter 7?
Sometimes. If you owe government taxes such as unpaid meal taxes or state, city or federal sales or payroll taxes to the IRS or the Department of Revenue, you should plan on having to pay them regardless of filing a bankruptcy.  However, certain income taxes, if they are old enough, may be discharged. The general rule (subject to exception) is that income taxes are dischargeable if they were assessed more than three years ago, but there are other requirements and exceptions to the rule.

 

 

 

  • Debtor and Creditor Representation
  • Business Reorganization
  • Chapter 7 & 13 Representation
  • Resources for Post-Bankruptcy Credit Status/Repair
  • Mortgage Loan Modifications