Frequently Asked Questions (FAQs) about Florida Bankruptcy was last modified: December 6th, 2015 by Howard Iken

chapter 7 bankruptcy

Questions about Florida Bankruptcy

If you are buried in debt and overwhelmed by aggressive collection agencies or harsh debt enforcement tactics, bankruptcy can relieve you of these financial pressures and provide a fresh start.  Many people avoid pursuing a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy because they do not understand the benefits a bankruptcy relief can provide to a debtor.  In other cases, debtors are apprehensive because they have received misinformation about the potential drawbacks of filing bankruptcy.  The reality is that bankruptcy is a powerful and effective process for helping people solve their personal debt problems.  We have provided answers to common questions we receive about Florida bankruptcy:


Will Bankruptcy make it impossible to obtain credit or purchase a home?


The fact is that most people with delinquent bills will never have their credit score recover. Unresolved debts stay on your credit record for at least 8 years. Most creditors sell off those unresolved debts to “debt-buyers”, a type of company that exists solely to make money on defaulted debt. Those debt buyers will most likely re-report the delinquencies to the credit bureaus over and over again.  This creates delinquent marks on your credit report that never seem to disappear, even after 8 years or more. A successful bankruptcy filing will help your credit score recover. Although you may have heard that bankruptcy will have a negative impact on your credit, many people actually improve their long-term prospects for obtaining credit, including a mortgage by obtaining a bankruptcy discharge.  A discharge can eliminate much of your debt and prevent the continued accumulation of derogatory credit reporting.  In as little as 24 months, you can climb back to a credit score most lender would consider “good.”


The impact of a bankruptcy on your credit will decline as time passes.  When you re-establish credit often with pre-paid cards or high interest cards initially, it is important that you accrue good credit history.  These will lead to credit offers at lower interest rates with fewer fees.  A person who receives a bankruptcy discharge becomes eligible for an FHA loan two years after the discharge as long as the debtor does not have derogatory credit after the discharge.


What debts will Chapter 7 bankruptcy eliminate?


Chapter 7 will extinguish your legal obligation to repay most forms of unsecured debts, such as credit card balances, unsecured lines of credit, medical bills, home utilities, cell phone bills and much more.  Unsecured debts include any loan that is not against a specific large asset such as a house or car. This means that you are not relieved of the obligation to pay your home mortgage, loans on financed vehicles and other obligations subject to a security interest.  There are also certain forms of unsecured debt that you are required to pay, including but not limited to family court type obligations like child and spousal support, some forms of taxes, student loans (with narrow exception), DUI related personal injury judgments or settlements and other obligations that Congress has made a priority obligation based on policy considerations.


What is the automatic stay?


All collection activity against you immediately terminates because of the “automatic stay.” The automatic stay is essentially an injunction that bars most debt collection activity once a bankruptcy has been filed.  The purpose of the automatic stay is to provide a temporary reprieve to debtors who are attempting to obtain bankruptcy relief.  Generally, this prevents creditors from taking any actions to enforce a debt so the harassing calls and letters, creditor lawsuits, wage garnishments and most other types of debt enforcement and collection efforts will cease.  Sometimes a creditor like your mortgage company will file a Motion for Relief from Automatic Stay to request permission to move forward with its legal remedies.  It is very important to have legal representation at such a hearing. In general any credit card collection lawsuits are frozen in their tracks immediately after a bankruptcy filing.


How does Chapter 7 differ from Chapter 13?


While Chapter 7 allows qualifying debtors to be excused from the obligation to pay most forms of unsecured debts, Chapter 13 involves making monthly payments toward your debts, which means some portion of credit card balances and other types of dischargeable obligations will be repaid.  While you may still receive a discharge of the balance on dischargeable unsecured debts upon completion of your 3 or 5 year repayment plan, you will not be completely excused from the obligation to repay something toward these debts. Ayo and Iken strictly recommends Chapter 7 filings – as being the most beneficial to our clients.


If I make a pretty good living, I presume I cannot qualify for Chapter 7 bankruptcy?


This is not necessarily true.  There are plenty of people that make over $100,000 per year that qualify for a Chapter 7 Bankruptcy discharge.  Even if you make substantially more than the median average income in Florida, you may still qualify for Chapter 7 depending on your financial debts and monthly payments.  If you contact one of our experienced Florida bankruptcy attorneys, they can advise you about whether you qualify. But in general it is more difficult to file a Chapter 7 in Florida if you are a high income earner.


While we have tried to answer some of the most common questions we receive about bankruptcy in Florida, the best way to get more specific information regarding your unique situation is to speak with an experienced bankruptcy lawyer.  Call us today at Ayo and Iken to schedule your confidential free consultation at 1-800-469-3486 or fill out the web form to receive a call from our staff.

florida lawyers

Our Attorneys Are Ready to Fight for You!

Over the past 14 years Ayo & Iken has helped over 5,000 people just like you

Our Attorneys Are Ready to Fight for You!


Over the past 14 years Ayo & Iken has helped over 5,000 people just like you

Jennifer helped my son through a horrible divorce and fighting for the safety of his children. She was awesome in court. Unfortunately she left KEL before it was finalized. Took months for the KEL new attorney got it finalized. I would recommend Jennifer to friend and family. But never make the mistake of hiring KEL. Law firm is too big for divorce. Went through 4 attorneys.

Charlotte – Avvo


Need assistance with this form?

Free Consultation is limited to individuals considering hiring an attorney. Not all situations qualify. Fee charged for appellate case evaluations.

Or email message to:

Helped me out completely…made my life a lot easier… Best of all Jason Ponder was 100% honest throughout the whole process & did everything based on what I really needed instead of just breaking the bank… Will definitely recommend him to any & everyone!!

Shawn – Avvo