The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 (liquidation) case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In a chapter 13 (adjustment of debts of an individual with regular income), the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor’s discharge in a chapter 13 case if the debtor fails to complete “an instructional course concerning financial management.” The Bankruptcy Code provides limited exceptions to the “financial management” requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.

Excerpt paraphrased from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.

Excerpted from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

The Bankruptcy Court can’t take my car if I file a Chapter 7 bankruptcy, right?

This is a common question for people filing bankruptcy in Florida. Many people assume that the Court will understand that they need the car for transportation—especially for work—and will allow them to keep the car for that reason. After all, how can the Bankruptcy Court expect you to get to work if they take your car? Sadly, in some cases you can lose your car.

Vehicle Exemption

Filing bankruptcy in Florida requires the Trustee to review your property and determine what is “exempt” from seizure by the Court. Exemption schemes do vary by state, and in Florida you are generally allowed to keep $1,000 equity in a vehicle. Equity refers to the value of the vehicle, in excess of liens, that you have in your property. For example, if you own a 2003 Honda Civic, the Kelley Blue Book value is approximately $6,800. If you own the car outright, with no lien, your equity is then $6,800. The Trustee would be able to sell the vehicle for the $6,800, give you $1,000 for your exemption, and then keep the remainder to pay the creditors. If you had the same car but with a lien on it for $6,000, your equity would only be $800, and you would be within the exemption limits and the Trustee would not be interested in taking your car.

Other Factors

Things get a little more confusing when you are married, and not jointly on the titles of your vehicles. For example, only the person whose name is on the title can claim an exemption on that vehicle. This can become complicated if only one spouse’s name is on two vehicle titles. Also, if the vehicle is owned jointly with someone else, your portion of ownership has to be determined to make the correct exemption calculation.

In Florida, there is a “wildcard” exemption that may be available to you to help in exempting equity in your vehicle, or in other property. Ordinarily, this exemption is only available if you do not own your own home, or own a mobile home but not the ground underneath it. This exemption can be used to exempt property that otherwise would become assets available to the Bankruptcy Trustee.

Protect Your Assets

To find out how the laws apply to your assets, contact a bankruptcy lawyer. Their goal is to help you protect your assets to the full extent of the law. They may have options available under the exemption laws that apply to your case, allowing you to keep your vehicle—and protecting your ability to get a fresh start.

To speak to an attorney that is experienced with the laws of bankruptcy contact Jill or Steve at The Law Offices of Jill McDonald.  Simply email us or phone us at (727)231.4300.

To have your student loans discharged you must show that repaying your student debt will impose an “undue hardship” on you and your dependents. Usually student loans are not able to be discharged.

In order to have your student loans discharged, you must file a separate motion and present your case to a judge. Both privately funded and federally funded student loans are treated the same way.

It is difficult, but not impossible, to show such a hardship. However, you generally will not be able to prove undue hardship unless the court finds that you are physically unable to work and have no chance of gaining future employment.

To speak to an attorney that is experienced with the laws of bankruptcy contact Jill or Steve at The Law Offices of Jill McDonald.  Simply email us or phone us at (727)231.4300.

Did you know that you can get one free credit report every year from the three big reporting agencies? That’s right, you can get a free report from Experian, Equifax, and Transunion. This is the ONLY government approved offer for free credit reports. Do you know the one with the catchy jingles on TV? They’re not so free. Don’t be fooled by their good humor and slick advertising. You can request your free report online, by phone or by mail. Visit AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. No matter how you request your report, you have the option to request all three reports at once or to order one report at a time.

With the current financial crisis that we are under we get asked this question quite a bit. Hopefully this will help answer those questions for you.

Can I File Chapter 13 After Filing A Chapter 7? Yes, you can file for Chapter 13 any time after your Chapter 7 bankruptcy is discharged.

Can I file Chapter 7 if I filed Chapter 7 a few years back? Only if it was over 8 years ago. But as an individual (versus a corporation) you have the option to file a Chapter 13 any time after your Chapter 7 bankruptcy is discharged.

How do I know when my Chapter 7 bankruptcy was discharged? You should have or will receive a notice from the bankruptcy court where you filed your Chapter 7 bankruptcy.

Most people who file a Chapter 13 bankruptcy are trying to save their homes from foreclosure, so it may be a better option than a Chapter 7 bankruptcy where you may have to sell your home and use any equity you may have to pay your creditors. For more specific information on your options based on your personal information, it is best to get advice from an experienced bankruptcy attorney.

If you would like to speak to an attorney about your specific situation then contact Jill or Steve at The Law Offices of Jill McDonald. You can call us at (727)231-4300 or visit our website JillMcDonald.com.