Q: Can I keep my house?
A: When you file a Chapter 7 bankruptcy, so long as you are current on your mortgage, you may keep your house and continue making your regular payments. If you own your home outright or there is a large amount of equity in it, your homestead exemption is unlimited as long as you have lived in the home for at least three years.
Q: What about my property taxes and HOA/Condo fees?
A: Property taxes are nondischargeable in bankruptcy, so if you want to keep your house, you must pay them. Same goes for Condo/HOA fees. If you intend to surrender your house, please remember that your Condo/HOA may also foreclose and take the property. Any Condo/HOA dues that come due after filing (post-petition) are not discharged in your bankruptcy and your association may come after you for that debt.
Q: Once I file bankruptcy, I can take out all new credit cards, right?
A: While your bankruptcy case is open, you cannot incur any new debt without prior court approval. Once your case is closed, you may begin rebuilding your credit. We caution all clients to be careful when taking out new credit cards.
Q: I was injured in a car accident and now might have a settlement coming my way. Do I need to tell the court about it?
A: Yes. Personal injury settlements are not necessarily exempt, so depending on when you receive the settlement and when you file, you may end up having to pay over those funds to your assigned Trustee.
Q: They can't take my car, right?
A: Yes, they can. If you own your car outright or have equity in it, you are responsible for either paying that equity to your Trustee or surrendering your vehicle. Certain exemptions do apply, so please ask for more details during your consult.
Q: Okay, but what about my stuff? They won't take it, will they?
A: There are certain exemptions that everyone who files Chapter 7 bankruptcy can take advantage of. These include certain amounts in your vehicle, your personal property (furniture, clothing, cash, etc.), and your homestead. These exemptions will be explained in more detail during your consult. If you exceed your allowed exemption, you will need to either surrender the asset or pay the equity to your Trustee.
Q: What will bankruptcy do to my credit?
A: A Chapter 7 bankruptcy will stay on your credit report for 10 years. Once the bankruptcy itself is closed, you may begin rebuilding your credit, but we caution everyone to be careful about taking out any credit cards.
Q: What's the Means Test?
A: If your yearly income is higher than the current IRS standard in the state of Florida for a family of your size, we must measure your monthly expenses against the median IRS allowed standard expenses to determine if you can still qualify to file Chapter 7.
Q: Someone I know died recently and I will be receiving an inheritance. Can I keep it?
A: Inheritances are considered nonexempt property in bankruptcy, so depending on when you file and when you receive it, you may have to pay that to your Trustee.
Q: I was sued by one of my credit card companies, and now there's a judgment against me. Can I discharge that in bankruptcy?
A: yes. Judgments for collections are dischargeable.
Q: Can I include my student loans and income taxes?
A: We need to list your student loans and any taxes you owe, but they are nondischargeable except in very narrow circumstances. Please ask for more details during your consult.
Q: What will happen to my 401(k) or IRA?
A: Your 401(k) is protected in bankruptcy. The rules about IRAs are somewhat different, so be sure to ask about this during your consult.
Q: I'll be getting a refund from the IRS for my taxes. What will happen to it?
A: Tax refunds are property of your bankruptcy estate. You will be required to pay a portion, if not all, of the tax refund to your Trustee.
Q: I can use my credit cards right up to the day I file, right? I mean, it all gets discharged, doesn't it?
A: No. The courts will assume that any credit card purchases you make within at least 90 days of filing are fraudulent, so you will still need to pay them back. We advise anyone thinking of filing bankruptcy to stop using their credit cards immediately.
Q: How long will my bankruptcy last?
A: Currently bankruptcies are lasting between one and two years, depending on whether you are an asset or no asset case. Please ask for more details during your consult.