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BANKRUPTCY
Chapter 7 Bankruptcy is a discharge of your debt. Filing a Chapter 7 Bankruptcy petition creates a bankruptcy trust.

Chapter 13 Bankruptcy is a reorganization plan. You can usually keep your property. You create a 5 year repayment plan, which must be approved by the court. (It can be 3 years.)You make payments to the trustee. You must have income.

The following are exempt from the bankruptcy trust:

     $1,000 equity in a vehicle

     $1,000 cash per person

     Personal property

     Homestead (equity up to $137,500)

     Unemployment and Workers Compensation

     Retirement and most Life Insurance

     Prepaid College Plans

The following cannot be discharged:

     Taxes, fines or penalties to local governments

     Child support or Alimony

     Student Loans

     Condo/co-op fees

Credit counseling is required before the petition is filed and again before the debt is discharged.

Your credit report will be obtained.

You must provide proof of social security number, the last 2 or 3 years tax returns and the last 6 months of pay stubs.

You may make a deal with the bank to keep paying on your car or with the mortgage company to keep paying on your house. This is called a Reaffirmation Agreement. You must be able to afford it and the Judge must approve the Agreement.

A Trustee will be assigned to your case and a creditor's meeting will be held within 40 days of filing the petition. You must attend and you must bring photo identification and proof of social security number. The Bankruptcy Court is located at the United States Courthouse in downtown Fort Myers. The creditor's meeting gives your creditors an opportunity to challenge the discharge of their debt. The Chapter 7 discharge of debt is generally issued within 90 days of the creditor's meeting.    

Bankruptcy is an honest procedure. It is governed by both Federal and State Law. If you do not list a debt, it will not be discharged. If the Judge thinks that you have committed fraud, such as hiding or destroying property, he or she may not allow the discharge. Even if the Judge grants the discharge or repayment plan and later discovers fraud, the Bankruptcy can be revoked.

Include all of your bank accounts and brokerage accounts.

Don't keep a bank account at a bank where you owe money.

Don't use your credit cards for anything other than necessaries, such as food and do not take any cash advances or write convenience checks, even for a balance transfer, or make large payments (over $600).

Don't give away money or property or try to hide anything.

If you are expecting a large tax refund or an inheritance, tell your attorney.

Disclose all businesses you own.

Don't cash out your retirement.

Use common sense and when in doubt, ask your attorney.

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