Helping You Get the Most Out of Bankruptcy
At The Law Offices of Justin McMurray, P.A., we work to help every one of our clients enjoy the full benefits of the provisions of the U.S. Bankruptcy Code. Bankruptcy is a powerful legal shelter for individuals and corporations that have fallen deeply into debt and cannot find any other way out. Unfortunately, ignorance of the complexity of the applicable laws can mean that you could reach the end of the process without having been able to discharge all of your eligible debts, and you might even lose some of your assets.
In a Chapter 7 bankruptcy, the court will appoint a trustee whose function is attempt to liquidate some or all of your personal estate in order to pay your creditors as much as possible of what you owe. Even before you get started on a Chapter 7 case, you will have to pass a means test of your income, and many people who are factually qualified fail the test because they are unaware of state and federal allowances that are available. Don't take chances with your case: Let a Jacksonville bankruptcy lawyer from our team guide you through the process and help you avoid potentially costly mistakes along the way.
Allowances for the Chapter 7 Means Test
Not everyone who files for bankruptcy under Chapter 7 is required to pass the means test. The test is only for those whose current monthly income is greater than the state median. There are several different allowances that can be claimed in cases in which the debtor's income is above this level. For example, it is possible to claim allowances for the costs of food, clothing, personal care products and housekeeping supplies, and these can be increased according to the number of people in your family. In addition, there are allowances available for housing and utilities based on the average costs in each county throughout the country. In Duval County, for example, the allowance for a single person who is renting a home is $422, or $971 for one who is paying a mortgage, while a family of four can claim $583 for rent or $1,340 for a mortgage. We can help you fully explore your financial situation to determine what allowances can be used to help you pass the means test.
Exemptions to Avoid Chapter 7 Liquidation
While the threat of possible liquidation is enough to keep many people away from Chapter 7 bankruptcy, the fact is that most cases of this type are “no asset” cases, meaning they are ones in which the debtor is able to avoid liquidation entirely. This is possible due to the fact that state law provides exemptions that can be used to safeguard property and assets from the claims of creditors. For example, Florida state law provides a homestead exemption that applies to any and all equity you have in your home, provided that you have no more than half an acre within a municipality or 160 acres elsewhere. There is a wage exemption of all of the head of household's income up to $750 in addition to wages held in a bank account for up to 6 months. You can also exempt up to $1,000 of equity in your automobile and the same amount in personal property.
In the event that you do not use the homestead exemption, you can instead increase the personal property exemption to $4,000 or $8,000 for a married couple. It is important to note that, in many cases, it is advisable to waive the homestead exemption in favor of the increased personal property exemption. This is due to the fact that a large percentage of homes in Florida are “underwater,” worth less on the real estate market than the homeowner owes on the mortgage. In such cases, the bankruptcy trustee would not be able to raise funds by liquidating the asset, so it is generally safe to give up the exemption in order to protect personal property such as furniture, jewelry, and appliances. Other things that may be subject to exemptions include pensions, education savings, alimony and child support, workers' compensation, and even insurance policies and annuities. Let us help you take full advantage of all the available exemptions so that you can enjoy the benefits of life after bankruptcy without having to sacrifice any of your personal property.