Preparation is the key for success when filing bankruptcy in Florida. The best bankruptcy cases go unnoticed as debtors glide through the system without attracting attention to receive a full discharges in record time. Luck is not involved. Planning began months before filing.
The most successful filers know something that you don’t. Small lifestyle changes may alter means test income and expenses before filing. Well-planned strategic changes will have a dramatic effect on the results of the means test. With a few weeks or months to plan, creating $300 improvement on the bankruptcy means test calculation will save $18,000 in wasted Chapter 13 payments. Just as easily, many people avoid Chapter 13 altogether and may file Chapter 7 when understanding the test procedure. Timing is critical.
2010 Bankruptcy Strategies and the Means Test Explained
Under 11 U.S.C. 727, a discharge is a release of liability in favor of the debtor which applies only to specific debts appearing within schedules filed with the court. Debts that must be listed within schedules include many common consumer obligations: loans, notes, credit cards, accounts payable, and contractual obligations. A discharge terminates obligations. No further payment are required.
An order of the court granting discharge acts as a federal injunction directed to each listed creditor, prohibiting further action to collect the debt, claiming the debt, or representing to any person or organization that the debt remains valid. Lawsuits are banned. All actions for collection are prohibited, including all phone calls requesting payments of any kind.
Be aware that debts secured by valid liens on collateral are not fully discharged in a Florida bankruptcy. Creditors retain rights to recover collateral, up to the value of the lien, but may not collect any amount owed beyond the lien value. In the most basic sense, a bankruptcy discharge charges off only unsecured obligations, including the unsecured portion of debts secured by collateral.
Debtors may selectively choose to repay any debt after discharge. Post discharge payments are voluntary. A post-discharge payment of a portion of a discharged debt, if made, does not act as a reaffirmation of the debt and no further payments are required.
Be aware the application of law to each individual is unique. Depending upon personal assets, liabilities, and financial history, all benefits may not be available. The most successful debtors retain Florida bankruptcy lawyers and plan well in advance. Through planning, with the assistance of qualified Florida bankruptcy lawyer, optimal timing, selective payments, and exemptions are most likely to be achieved without question.
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