Chapter 7 Bankruptcy in Sarasota, Florida
Liquidation bankruptcy to discharge eligible debts and achieve a fresh financial start quickly.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a liquidation bankruptcy, meaning a trustee may sell your non-exempt assets and use the proceeds to pay creditors. However, Florida has generous exemptions, and most people who file Chapter 7 keep most or all of their property.
Chapter 7 is relatively quick, with most cases concluded within 3–6 months. Eligible debts are discharged, meaning they are eliminated and creditors cannot pursue collection. After discharge, you have a fresh start financially.
The trade-off is that Chapter 7 appears on your credit report for 10 years. However, many people find that after bankruptcy, they can begin rebuilding credit relatively quickly. The relief from overwhelming debt and the financial fresh start often make this trade-off worthwhile.
Eligibility and the Means Test
To qualify for Chapter 7 bankruptcy, you must pass the "means test," which is a calculation that compares your income to the median household income in Florida. If your income is below the median, you qualify automatically.
If your income exceeds the median, the means test looks at your income versus necessary expenses and debt obligations. You may still qualify for Chapter 7 if, after accounting for necessary expenses, you don't have enough disposable income to fund a meaningful Chapter 13 repayment plan.
We help evaluate your specific situation and determine whether Chapter 7 is available to you. If Chapter 7 is not available due to income, Chapter 13 may be a good alternative.
Additionally, you must have received credit counseling from an approved agency within 180 days before filing. We can guide you to a reputable counselor and help with all documentation.
What Debts Can Be Discharged in Chapter 7
Generally Dischargeable Debts
- ✓Credit card debt
- ✓Medical bills
- ✓Personal loans
- ✓Payday loans
- ✓Unpaid utilities
- ✓Collection accounts
Generally NOT Dischargeable
- ✗Student loans
- ✗Child support
- ✗Alimony
- ✗Recent taxes
- ✗Court fines
- ✗Fraud-related debts
Questions About Chapter 7 Bankruptcy
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