Law Offices
of
Adam Farber
Helping you Build, Protect and Rebuild your Future
BANKRUPTCY
WHAT IS A CHAPTER 7 BANKRUPTCY?
By filing for Chapter 7 in Florida, you can be freed from a variety of debt obligations such as credit cards, hospital bills and leases. Not only that but the court will release you from all responsibility on these debts. Furthermore, this process immediately halts any collection actions against you like vehicle repossessions or home foreclosures – giving you the breathing room to start fresh financially!
Chapter 7 bankruptcy, often referred to as a liquidation bankruptcy, could mandate that the debtor (borrower) sells off certain assets. But fear not! Thanks to Florida's exemptions for many of the borrower’s possessions, these assets are protected from liquidation and can remain in their possession. As long as an asset is exempt from the bankruptcy proceedings, it won't be necessary for the debtor to sell them off.
At Law Offices of Adam Farber, P.A., we have helped many clients discharge their debt under Chapter 7 without having to liquidate any of their assets. We maximize the Florida exemptions to their fullest extent, safeguarding our client's property and preserving their rights in bankruptcy court.
If you are living in the state of Florida and considering filing for Chapter 7 bankruptcy, know that not everyone will qualify. The Bankruptcy Means Test is essential to determine eligibility - this requires applicants' disposable monthly income to be less than the median amount for those residing in Florida. Disposable income refers to what's leftover after deducting expenses such as car payments and retirement plan contributions from your total earnings.
If your total monthly income is higher than the Florida median adjusted income, you can still pass the Means Test with flying colors by taking advantage of all available deductions. Our team has an intimate understanding of which deductions apply where and we've already assisted borrowers who would have otherwise fallen short on their test due to lack of awareness.
Filing for Chapter 7 bankruptcy does not necessarily mean you will lose your cars, homes, bank accounts and other possessions. To the contrary, most individuals are able to keep these assets up to a certain value set in each state. However, if your assets exceed this amount then there is potential that they may be sold off by the Bankruptcy Court to pay creditors. The court’s priorities vary across states but it seeks to protect as much of an individual's property as possible under law so that those who have experienced financial difficulty can continue on their path towards stability.
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WHAT IS A CHAPTER 13 BANKRUPTCY?
Chapter 13 Bankruptcy is a type of bankruptcy where you make payments to creditors over time based on what you can afford. You will work with the court to come up with a payment plan that works for you and your creditors.
Reasons to File Chapter 13 include:
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You can keep your property and assets.
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Your debts are consolidated into one monthly payment plan that is affordable for you.
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The repayment period is usually 3-5 years, depending on your income and other factors.
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You can stop harassing creditor calls and letters immediately upon filing bankruptcy protection with the court.
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Collection activities, like wage garnishment or bank levies, will be stopped when you file Chapter 13 Bankruptcy Protection with the court .
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Creditors cannot increase interest rates or add late fees to your debt during a Chapter 13 Bankruptcy case .
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You may be able to reduce certain secured debts (like car loans) down to their current value by reducing principal balance owed .
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Certain tax debts may be discharged in a Chapter 13 Bankruptcy case but not all taxes qualify for dischargeability .
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Chapter 13 Bankruptcy can help those who are facing foreclosure on their home, as they may be able to keep their home while they pay back creditors over a 3-5 year period. During the repayment period, creditors are barred from initiating any foreclosure proceedings against the debtor.
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Your credit score will start improving as soon as payments begin being made through your repayment plan
WHAT IS THE BANKRUPTCY MEANS TEST?
The bankruptcy means test is a financial calculation used to determine whether you qualify to file for Chapter 7 bankruptcy, which allows you to eliminate most unsecured debts like credit cards and medical bills. The test compares your income to the median income for a household of your size in Florida. If your income is below the median, you automatically pass and may file for Chapter 7.
If your income is above the median, the means test takes a deeper look at your monthly expenses—such as housing, food, transportation, taxes, and child care—to see if you have any disposable income left over to repay your debts. If the test shows that you can afford to pay a portion of your debts, you may be required to file Chapter 13 instead, which involves a structured repayment plan.
The means test is not just about numbers—it's about accurately presenting your financial situation. At the Law Offices of Adam Farber, we help clients navigate the means test with care and precision, ensuring all allowable deductions and special circumstances are considered. Whether you qualify for Chapter 7 or Chapter 13, we’ll guide you toward the best path for a fresh financial start.
Special Exemption for Disabled Veterans
If you are a disabled veteran, you may be exempt from the means test entirely. To qualify for the exemption, you must have incurred the majority of your debts while on active duty or performing homeland defense activities, and you must have a disability rating of at least 30% from the U.S. Department of Veterans Affairs. This means you can file for Chapter 7 bankruptcy without having to go through the means test—even if your income is above the median.
At the Law Offices of Adam Farber, we’re proud to help veterans access the financial relief they’ve earned. If you think you may qualify for the exemption, we’ll make sure it’s properly documented and applied to your case.
Disclaimer
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create an attorney-client relationship, and receipt or viewing does not constitute an attorney-client relationship.