Bankruptcy FAQs

What is bankruptcy?

Bankruptcy allows individuals, married couples, and businesses heavily to either wipe out most of their debt or to work out a repayment plan over a period of 3-5 years.

What is a Chapter 7 bankruptcy?

This form of bankruptcy gives people a fresh start by wiping out their credit card and other debts.

What is a Chapter 13 bankruptcy?

This form of bankruptcy allows people to make payments on debts over a period of 3-5 years, after which time the remaining debt may be discharged.  This repayment plan is available to people who do not qualify for Chapter 7 because they wish to keep certain non-exempt assets, such as second homes or boats.

What is a Chapter 12 bankruptcy?

A bankruptcy filed under Chapter 12 of the Bankruptcy Code is similar to a Chapter 13, but it is only available for farmers and fishermen.

What is a Chapter 11 bankruptcy?

A Chapter 11 bankruptcy involves a reorganization of finances and is therefore available for businesses.  Individuals may also file under this chapter, but this is only appropriate in very rare situations and is extremely complex.

Who can file for bankruptcy?

People or businesses may qualify for different forms of bankruptcy depending on a number of factors, including their income and type of debt.  For individuals and married couples, a means test is used to determine whether they qualify for Chapter 7 or Chapter 13 bankruptcy. 

What’s the difference between secured and unsecured debt?

Secured debt is debt that is secured by collateral, such as a mortgage or car loan.  Unsecured debt is debt not secured by collateral, such as credit cards.

What is a bankruptcy discharge?

A bankruptcy discharge is the final step after filing a bankruptcy petition.  It is an order by the U.S. Bankruptcy Court officially discharging (wiping out) all qualifying debt. 

What debts are not discharged?

Most unsecured debt is eliminated in a bankruptcy, except the following:

• student loans;
• child support and alimony;
• income tax debt;
• debts not listed on the bankruptcy petition;
• debts for personal injury or death caused by your drunk driving; and
• purchases of $600 or more for luxury goods or services within 90 days of filing.

Will I ever be able to get credit again?

Yes!  A bankruptcy discharge remains on your credit report for 10 years.  However, many persons and businesses are able to obtain financing and credit cards within a much shorter time.

How long does the bankruptcy process take?

The process begins with filing a bankruptcy petition and concludes with a discharge of debt.  During that time, the debtor (person or business filing for bankruptcy) must attend credit counseling and a 341 meeting of creditors with a representative for the bankruptcy trustee.  In a Chapter 7, the process from filing to discharge takes approximately 4 months.  In a Chapter 13, the repayment plan may last 3 to 5 years.

Does my spouse have to be included in my bankruptcy?

No.  Married persons may file individually, and their spouses’ personal debt and credit generally will not be affected.  However, non-filing spouses remain responsible for all joint credit cards and other obligations they co-signed on.

Can I file for bankruptcy again if I already filed before?

Yes.  A Chapter 7 may be filed 8 years after a previous Chapter 7 filing, or 6 years after a previous Chapter 13 filing.  A Chapter 13 may be filed 4 years from a previous Chapter 7 filing or 2 years from a previous Chapter 13 filing.

Will I lose my house?

No, if you live in Florida and the home you own is your primary residence.

What if my home is already in foreclosure?

Filing a bankruptcy petition automatically stays (puts on hold) all other pending lawsuits and court actions, including a residential foreclosure. 

How much personal property can I keep?

Bankruptcy law provides for personal exemptions that allow debtors to keep certain assets out of bankruptcy.  In a Chapter 7, for example, debtors may keep their primary residence and personal items whose total value is $1,000 (or $5,000 if the debtors do not own a home).  The amount and kind of personal and real property you can keep will depend on your circumstances and type of bankruptcy filed.

Can I keep my car?

Generally, yes.  However, this depends whether or not it is financed and whether there is equity in it.  In a Chapter 7 bankruptcy, Florida debtors are entitled to a $1,000 exemption in the equity of their motor vehicles.

Will I lose my 401K and other retirement accounts?

No.  These are exempt items, meaning the bankruptcy trustee may not take this money and use it to pay your creditors.

Can I keep using certain credit cards?

Generally, all credit card accounts are closed once the bankruptcy petition is filed; however, you may be able to reaffirm the debt and reopen the account.

Can I lose my job if I file bankruptcy?

No.  Federal law (11 U.S.C. Section 525(b)) prohibits private employers from terminating or otherwise discriminating against employees because they filed for bankruptcy protection.

The attorneys at PERENICH The Law Firm have over 20 years handling personal and business bankruptcy cases for debtors, along with residential home mortgage foreclosure defense.  Time may be of the essence, so call us today for a free consultation.

We have offices conveniently located throughout the Tampa Bay area in Pinellas, Hillsborough, and Pasco Counties, including Clearwater, Tampa, St Petersburg, and New Port Richey.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.