If you’re considering bankruptcy in Sarasota, you likely have some questions. Do you qualify for bankruptcy? Are the laws different here than you’ve experienced in the past? Which bankruptcy chapter is right for me? At the law offices of Richard V. Ellis, we’ve helped hundreds of Sarasota residents get back on their feet financially. After working with so many people, we’ve heard a lot of questions. Here are some of the most common questions and the answers you need.

Remember! This information is meant to guide you, but you should always speak to an experienced Sarasota bankruptcy attorney before making a decision. Laws change, and circumstances are nuanced – but we are here to help.

The Most Common Questions About Bankruptcy

  1. Do I qualify to file for bankruptcy? Almost anyone who can show proof that they are struggling to pay their debts will be eligible to file for bankruptcy. To file a bankruptcy petition, you will first be required to complete a credit counseling course within the six months prior. There may also be some time constraints if you have filed for bankruptcy in the past, but an attorney can help you work through those details.
  2. Do I qualify if I filed for bankruptcy in the past? If you filed for Chapter 7 in the past and your debt was successfully discharged, you are permitted to file another Chapter 7 petition after eight years. If you opt for a Chapter 13 repayment plan after completing a Chapter 7 bankruptcy, there is a four-year waiting period. These waiting periods – either 4 or 8 years – are calculated from the date your most recent bankruptcy was filed. If you received a discharge in a previous Chapter 13 filing, you only have to wait two years to refile a bankruptcy petition for the same chapter. We understand this can all be confusing, but an attorney can help.
  3. What if my prior bankruptcy claim was dismissed? If a prior personal bankruptcy was dismissed for fraud or a court violation, there is a 180-day waiting period, calculated from the dismissal date, until you are permitted to re-file.
  4. Does my income affect my eligibility for bankruptcy? Your income, assets, and debt will influence your decision on the type of bankruptcy you file. One of the most common types of personal bankruptcy is Chapter 7, which is largely determined by your income. There are income limits, and eligibility is determined by a means test – which evaluates your income and expenses and determines if your disposable income is low enough to qualify. (Read more about the means test here.) If you have a steady income and can meet your expenses, you may not qualify for Chapter 7 and might have to file under Chapter 13.
  5. What type of bankruptcy should I file? The two primary personal bankruptcy options are Chapter 7 and Chapter 13. About 62% of bankruptcy cases filed are Chapter 7, and 38% of cases filed are Chapter 13, according to a 2019 report. (Source: U.S. Congress) There are many factors that go into choosing which chapter is right for you, but basically, it comes down to eliminating debt and starting over (Chapter 7 liquidation) or agreeing to a payment plan to repay your debt. (Chapter 13 debt restructuring.) We have written extensively about these two options in these previous blogs.
  6. Will all my debt be gone after the bankruptcy is complete? Whether you file Chapter 7 or Chapter 13, some types of debt rarely (or never) get discharged in bankruptcy. For instance, filing for bankruptcy won’t remove your responsibility for child support or alimony payments, nor will it eliminate court fines, criminal actions, and many types of IRS garnishments.
  7. Will I lose my home, car, or belongings if I file for bankruptcy? This is one of the most common questions we hear, and it is understandable. The good news is that much of your essential property, like a home, car, tools, wedding rings, and even retirement funds, can be protected through legal exemptions. These specific laws protect your property from creditors. Bankruptcy exemptions are set by state law and federal law, meaning the exemptions in Sarasota, Florida, may be different than those in Chicago or Houston.
  8. How much does a bankruptcy cost? While not free, bankruptcy is a smart investment in your future. There are three basic types of bankruptcy costs you should understand before filing: Court filing fees, attorney fees, and miscellaneous fees throughout the process.
      • As of this writing, court filing fees in Florida are $338 for Chapter 7 and $313 for Chapter 13. Depending on the circumstances, you may be able to ask for a waiver or to pay the fee in installments.
      • You must take a credit counseling course before filing for bankruptcy and a financial management class after. These course fees range from $10 to $50.
      • There may be some small document fees along the way.
      • Legal fees are often the largest cost associated with filing for bankruptcy, and you are not required to hire an attorney to do so. However, bankruptcy can be a complex legal process best navigated by someone with knowledge who can deliver the best result. Call first for a consultation to determine the best way to proceed.

Bankruptcy can seem intimidating – and you may have a lot of questions. But the team at Richard V. Ellis are here to help Sarasota residents, whether with common questions or complex financial situations. Don’t face it alone, call Richard V. Ellis today.