Bankruptcy FAQs

Bankruptcy FAQs

Q: What is Bankruptcy?

A: Bankruptcy is a process that lets people who cannot afford to pay their debts have them forgiven. The end result of a Bankruptcy is a Bankruptcy Discharge. There are different types of bankruptcies for people in different financial situations. The best way to know which Bankruptcy is best for your unique debt situation is to speak to an Attorney and make an informed decision. At The Mobile Attorney we offer a FREE consultation WHEREVER you are. Call us today for your FREE in-home consultation.

Q: Do I need to file a Bankruptcy?

A: Bankruptcy is not for everyone. The best way to find out if a Bankruptcy is a good and viable option is to speak to an Attorney. Bankruptcy may not be an option for many of you reading this FAQ. If you are only struggling to pay one (1) or two (2) debts, a debt settlement/negotiation may be a better solution to your debt problem. At The Mobile Attorney, we will help you assess your debt and make an informed decision as to what solution is most doable for you.

Q: What kinds of Bankruptcy can your office help me with?

A: At The Mobile Attorney, we focus our Bankruptcy practice to Chapters 7 and 13. A Chapter 7 Bankruptcy is a Liquidation, and results in the forgiveness of most unsecured debts. Chapter 13 is a Monthly Payment Plan to the Bankruptcy Court, and can be used to correct arrears on secured debts.

Q: What is the difference between a Secured Debt and an Unsecured Debt?

A: Secured Debt is a debt that is attached to a specific piece of property. The Creditor in a Secured Debt has a Security Interest in the collateral that secures the debt. For example, a Car Loan is secured by the Car. If you do not pay your car loan, the bank can repossess your car. An Unsecured Debt is any debt that does not have a Security Interest. Unsecured Debts include credit cards, medical bills, personal loans and other similar debts.

Q: Does filing for Bankruptcy mean I will lose everything I own?

A: When a Bankruptcy is filed, your property no longer belongs to you. What used to be your property goes into what is called the "Bankruptcy Estate." The good news is that, under the Bankruptcy Code, there are many different ways to "exempt" or protect your property from the Bankruptcy Estate. Each state has its own exemptions from the Bankruptcy Estate.

Q: What Property Can I Keep if I file Bankruptcy?

A: In Florida, there are four (4) major exemptions that apply in almost every single case.

  1. Debtors in Florida can exempt their Homestead property, as long as they are current on their mortgage.
  2. Each Debtor who files a Bankruptcy can keep up to $1,000 in Personal Property. Your Personal Property is everything you own that can move, such as furniture, clothing, jewelry and other household goods. For a Married Couple, that means you can keep up to $2,000 in Personal Property. Debtors that are not protecting a Homestead, are eligible to use the "Wild Card" or "Super" exemption, increasing their Personal Property Exemption by $4,000.
  3. Money saved for retirement in a retirement account such as a 401(k), 403(b) or an IRA is entirely exempt from the Bankruptcy Estate.
  4. Each Debtor in a Bankruptcy is allowed to exempt up to $1,000 worth of a Motor Vehicle. That $1,000 is not based on the actual value of the Vehicle you are trying to exempt, but rather the equity that you own of the vehicle. Equity is calculated by the actual value of the car minus any debt attached to the car. This means if you own your car outright, it must be worth less than $1,000. However, a vehicle with a loan on it can be worth significantly more than $1,000 as long as there is a debt associated with the car.

Q: Can I keep my house in a Bankruptcy?

A: Under Article X Section IV of the Florida Constitution, your Homestead property is exempt from Collection Action. This means that you can keep your Homestead Property in any kind of Bankruptcy that you file in Florida. What makes Florida special is that the Homestead Exemption is unlimited. You can keep your Homestead and it does not matter how much equity you have in your home. Your home must meet the requirements of being a Homestead under Article X Section IV of the Florida Constitution. Aside from that, the only requirement to protect your Homestead in a Bankruptcy is that, if you have a Mortgage, you are current on your Mortgage payments.

Q: What if I'm not current on my Home's Mortgage?

A: In a Chapter 7 Bankruptcy, you can only keep your Homestead property if you are current on your mortgage. However, in Chapter 13 you have multiple options to save your Homestead. Chapter 13 allows you to apply for a Mortgage Loan Modification. If your Mortgage Modification is not approved, you can choose to catch up on your Mortgage payments by paying the arrears inside of the Bankruptcy as well as the regular Mortgage payments through your Chapter 13 Plan.

Q: Do you offer payment plans?

A: At The Mobile Attorney, we know that most people interested in filing a bankruptcy are financially struggling. Because of this we allow all of our clients to make payments in flexible installments. We will never pressure you into paying more than you are able to. We allow you to pay what you can when you can. However, because the Bankruptcy is indiscriminate and forgives all your debts, we need to be paid in full prior to the filing of your case.

Q: How long does the process take?

A: It depends on the Chapter of Bankruptcy you file. A Chapter 7 Bankruptcy usually takes between four (4) and six (6) months. A Chapter 13 Bankruptcy takes between three (3) and five (5) years of making monthly payments.