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Filing for bankruptcy is a legal process that can provide individuals and businesses in Miami with a fresh start when facing overwhelming financial difficulties. Understanding the various aspects of bankruptcy law and the specific procedures involved is important to accomplish this complicated process. An experienced bankruptcy lawyer in South Florida can assess all available avenues for your unmanageable debt and create a personalized bankruptcy strategy to help you move forward.

Types of Bankruptcy in Miami

There are three types of bankruptcy available to individuals and businesses:

  • Chapter 7 Bankruptcy: Popularly known as liquidation bankruptcy, Chapter 7 helps individuals and businesses discharge unsecured debts, such as credit card debt and medical bills. In Miami, Chapter 7 filers must pass a means test to determine eligibility.
  • Chapter 11 Bankruptcy: Unlike Chapter 7 bankruptcy, which involves liquidation of assets, Chapter 11 allows businesses to reorganize their debts and operations. It is not limited to any particular type of business and can be used by corporations, partnerships, sole proprietorships, and individuals with significant debt.
  • Chapter 13 Bankruptcy: Also known as reorganization bankruptcy, Chapter 13 allows individuals to create a repayment plan to pay off, in most instances, some of their debts over three to five years. This option is helpful for individuals who want to protect their assets and have a reliable source of income.

Choosing between the different types of chapters under the bankruptcy code depends on your financial situation. Qualified legal representation can be helpful in protecting your financial health in the best possible manner through bankruptcy.

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How to File for Bankruptcy in Miami?

Filing for bankruptcy in Miami-Dade involves several steps and requires careful attention to detail. Here is a general outline of this debt relief process:

Hire an Attorney

The legal services of an experienced bankruptcy attorney are strongly advised. A lawyer can guide you through the process of adversary proceedings, ensure all paperwork is completed correctly, and help protect your assets.

Determine Your Eligibility

You need to ensure you meet the residency requirements for filing in Florida. Your attorney will scrutinize the paperwork to assess whether you qualify for Chapter 7, Chapter 11, or Chapter 13 bankruptcy based on your income and financial circumstances.

Attend Credit Counseling

Before filing, you need to complete a credit counseling course from a government-approved agency. This is mandatory and will help you explore all alternatives based on your credit report. You can speak with your legal counsel about other available options.

Gather Required Documents

A seasoned bankruptcy attorney will help you collect all financial documents, including pay stubs, tax returns, bank statements, a list of debts, asset valuations, and monthly expense records.

Complete Bankruptcy Forms

Your Miami bankruptcy attorney will understand your requirements and fill out the necessary forms, including the petition, schedules, and statements. These forms detail your financial situation, assets, income, expenses, and debts.

File Bankruptcy Petition

The legal team will submit your completed Miami bankruptcy forms to the U.S. Bankruptcy Court for the Southern District of Florida. You may need to pay a filing fee unless you qualify for a fee waiver.

Attend the Meeting of Creditors (341 Meeting)

Approximately 20-40 days after filing, you will attend a meeting with the bankruptcy trustee and your creditors. You should have a competent bankruptcy attorney accompany you to this meeting since it is an opportunity for creditors to ask questions about your finances.

Chapter 7 Liquidation or Chapter 13 Repayment Plan

If you filed for Chapter 7, the trustee may liquidate non-exempt assets to pay creditors. If you filed for Chapter 13, your attorney will work on drafting a repayment plan of the amount that needs to be repaid.

Receive Discharge (Chapter 7) or Order of Discharge (Chapter 13)

In an personal Chapter 7, once the trustee has completed the liquidation process and you have fulfilled all requirements, you will receive a discharge, which eliminates eligible debts. Please note that a Business Chapter 7 does not receive a discharge. A Business Chapter 7 is only ideal when the business will not continue operating.  In Chapter 13, you will receive an order of discharge after successfully completing all your payments in your repayment plan. You should consult with qualified Miami bankruptcy attorneys who can provide personalized legal assistance and ensure your case proceeds smoothly.

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How Do I Qualify for Chapter 7 in Florida?

Here's how you can determine your eligibility for Chapter 7 bankruptcy in Miami:

  • Residency Requirement: In order to enjoy the Florida Exemptions, you need to have lived in Florida for more than 730 days before filing for bankruptcy in the state.
  • Pass the Means Test: This test compares your income to the median income for a household of your size in Florida. If your income is below the median, you typically qualify for Chapter 7 consumer bankruptcy. If your income exceeds the median, you may still be eligible if your disposable income, after accounting for certain allowed expenses, is low enough to pass the means test.
  • Non-Consumer Debts: If most of your debts are non-consumer debts (debts incurred for business purposes), you may not be subject to the means test. However, this is less common for individuals, as Chapter 7 is typically used for financial relief.
  • No Prior Chapter 7 Discharge: You cannot file for Chapter 7 bankruptcy if you have received a discharge in a Chapter 7 case within the past eight years.
  • No Prior Chapter 13 Discharge: If you previously filed for Chapter 13 bankruptcy and received a discharge, you must wait six years from the date of your Chapter 13 filing before you can file for Chapter 7 and receive a discharge.

It's prudent to consult with experienced consumer bankruptcy attorneys in Florida who can assess your financial situation and help you complete the means test accurately. They can also ensure that you meet all eligibility requirements and comply with the necessary legal procedures.

How Does Chapter 13 Work in Florida?

Chapter 13 bankruptcy provides individuals with a regular income and a structured path to manage their debts over a specified period, typically three to five years. The process begins with the filing of a Chapter 13 petition in the U.S. Bankruptcy Courts for the Southern District of Florida, Miami Division, with a required filing fee. Upon filing, an automatic stay is triggered, halting creditor collection actions such as foreclosures or wage garnishments. In Chapter 13, you propose a repayment plan, to the court, outlining how you intend to pay off your debts, focusing on secured debts like mortgages and car loans while allocating any disposable income toward unsecured debts. An essential step is attending the Meeting of Creditors, where you discuss your plan with the bankruptcy trustee and creditors. The court reviews and confirms your proposed plan to ensure it complies with bankruptcy laws and is feasible. Once confirmed, you need to make regular payments to the trustee, who then disburses funds to creditors. Successful completion of the repayment plan results in an order of discharge, which eliminates any remaining unsecured debts included in the plan, though some non-dischargeable debts, such as student loans and domestic support obligations may persist. Importantly, Chapter 13 allows you to retain your assets, including non-exempt ones, as long as you adhere to the plan terms. Before receiving a discharge, you must complete a financial management course, equipping you with tools to manage your finances more effectively. It's advisable to seek guidance from an experienced bankruptcy law firm in Florida to file successfully and ensure compliance with all legal requirements.

Is it Necessary to File for Bankruptcy When in Debt?

Filing for bankruptcy can provide relief and financial stability for individuals and businesses facing overwhelming debt. Here are several ways in which filing bankruptcy through a Miami bankruptcy lawyer can help:

  • Debt Discharge: One of the primary benefits of bankruptcy is the potential to discharge or eliminate certain types of unsecured debts. In Chapter 7 bankruptcy, many unsecured debts, such as credit card debt, medical bills, and personal loans, can be completely wiped out. In Chapter 13, a portion of unsecured debts may be discharged after completing a repayment plan.
  • Automatic Stay: When you file for bankruptcy, an automatic stay goes into effect, which immediately stops most creditor collection actions. This includes foreclosure, wage garnishment, repossession, and harassing calls from debt collectors. The automatic stay provides a breathing space to assess your financial situation and plan a path forward.
  • Bankruptcy Protection: Bankruptcy laws provide exemptions that allow you to protect certain assets from liquidation. Depending on the type of bankruptcy and your state's exemptions, you may be able to keep your home, car, retirement accounts, and personal belongings.
  • Repayment Plans: In Chapter 13 bankruptcy, you can create a structured repayment plan to catch up on car loan payments or missed mortgages and pay off debts over time to prevent foreclosure sales. This can help you avoid repossession while regaining control of your finances.
  • End Creditor Harassment: Filing for bankruptcy stops creditor harassment and affords financial freedom. Once the automatic stay is in place, creditors are required to cease all collection efforts, including phone calls, letters, and lawsuits.
  • Tax Relief: Certain tax debts may be eligible for discharge or repayment through bankruptcy cases, providing relief from tax liabilities.

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Can You File Bankruptcy Online in Miami, FL?

Your Bankruptcy Attorney can initiate a bankruptcy case in Florida by filing bankruptcy forms online through the court's Electronic Case Filing (ECF) system. You can access and complete the necessary bankruptcy forms, including your bankruptcy petition, schedules, statements, and other required documents. It's essential to be thorough and accurate when filling out these forms. You will need to give your attorney various supporting documents, such as pay stubs, tax returns, and financial statements, as part of your bankruptcy filing. In Chapter 7, if everything goes smoothly and your debts are eligible for discharge, you will receive a discharge order, which eliminates your qualifying debts. In the case of Chapter 13, after successfully completing your repayment plan, you will receive an order of discharge for eligible debts.

Discharge Your Debts with Help from Top-Rated Bankruptcy Lawyers in Florida

The experienced bankruptcy attorneys at Rivera Law Firm, P.A. will work closely with you to create an individualized bankruptcy plan that fits your specific needs and goals. Our attorneys have a proven track record of helping individuals and businesses find relief from overwhelming debt. We will work to protect your assets and rights throughout the bankruptcy process, ensuring you get the best possible outcome. To schedule your free bankruptcy case evaluation, call us at 786-529-6060 or fill out this online contact form.