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6c_Foreclosure_JALA_Bankruptcy+Brochure-03-02-2009

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					The Bankruptcy Code is designed to          on the individual's income or future       trustee, and creditors who request            to a discharge of your debts, or
provide relief to people and                assets. Certain debts are                  them, copies of their recent tax returns.     whether there is some reason why he
businesses in financial distress.           "nondischargeable" which means that        Debtors must file with the court any          or she should ask the bankruptcy
Although bankruptcy can benefit some        a bankruptcy will not excuse them.         pay stubs they received in the 60-day         judge to deny your discharge.
people, a person cannot obtain these        "Nondischargeable" debts include child     period prior to filing their petition with    You should understand that in some
benefits without assuming certain           support, alimony, federal taxes, certain   the court.                                    cases the trustee or a creditor may
duties. If after considering the benefits   student loans, payment of a fine in a      Debtors are now subject to the means          object to your eligibility to receive a
and burdens associated with                 criminal case and debts arising from       test. If a debtor’s family monthly            discharge of your debts. If the trustee
bankruptcy you want to obtain the           the commission of a willful wrongful       income is greater than the median             or a creditor objects to the discharge of
relief provided by the Bankruptcy           act.                                       income for her state, she may be              a debt, for example, on the basis that
Code, you must file a petition and a list                                              subject to a means test (after                the debt arose through the debtor's
of all your debts and your property,        New Requirements                           deducting allowable expenses based            fraud, then the creditor would actually
together with the appropriate filing fee,                                              on IRS guidelines for necessities).           have to prove the case before the
with the Federal Bankruptcy Court.          On April 20, 2005 and October 17,                                                        bankruptcy judge as with any other
These lists of debts and property must      2005, major changes went into effect       Once you have filed, the court will set       lawsuit. If there is no objection to the
be prepared on forms approved by the        in the bankruptcy laws. Many of these                                a date for an       dischargeability of a particular debt,
court. It is very important that these      changes impose new requirements on                                   appearance          then it will be discharged. There are
lists of debts and property are accurate    consumer debtors.                                                    which is called     also instances where a discharge will
and complete in all respects. You may                                                                            the "first          be denied as to all debts; for example,
file either an individual bankruptcy        Before a person may file a consumer                                  meeting of          where the debtor has purposely
petition or a joint bankruptcy petition     bankruptcy petition, within 180 days                                 creditors." The     concealed records from the trustee in
with your spouse.                           before filing her petition, she must                                 court will notify   order to hide assets.
                                            complete a credit counseling briefing      you and all of your creditors of the time
What are the different Bankruptcies?        given by a U.S. trustee approved           and place of the meeting and you will         If you have been permitted to have
                                            agency. There are some exceptions for      be required to attend. When a                 your debts discharged, you must turn
There are four types of bankruptcies        genuine emergencies where the debtor       bankruptcy case is filed, an estate is        over to the bankruptcy trustee all of
available to individuals: a Chapter 7       has tried to, but is not able to get the   created comprised of all your property        your property except for certain assets
liquidation, a Chapter 11                   counseling before filing her petition      as of the date the bankruptcy petition        which the law allows you to keep as
reorganization, a Chapter 12                with the court. In order to receive a      is filed. The judge will appoint a trustee    "exempt." In Florida, an individual may
adjustment of debts for family farmers      discharge of debts from the court, the     who will act as the representative of         keep between $1,000 and $4,000 in
only, and a Chapter 13 adjustment of        debtor must take an education course       your estate. The trustee's duty is to         personal property based on whether
debts. A Chapter 7 liquidation allows       after she files her case and before        take possession of your property, to          you own a homestead and $1,000 of
an individual to obtain a discharge,        discharge of her case. There are now       examine claims creditors may file and         their interest in a motor vehicle. An
which relieves the debtor from any          two courses debtors must take: one to      determine whether they are proper,            individual's home is also considered
debts owed as of the date that the          get the case filed and a second one to     and to sell the property of your estate       exempt, but bankruptcy does not wipe
bankruptcy petition is filed. Creditors     receive a discharge.                       in order to reduce it to cash for             out most mortgages. If an individual
then will be unable to try to collect                                                  distribution to your creditors. It is also    wants to keep his or her house,
those debts or sue the individual and       Debtors now must file more documents       the duty of the trustee to determine          generally he or she must continue the
obtain a valid judgment. With a few         with the court when they file              whether you have properly listed all of       payments on the mortgage.
exceptions, the creditors have no claim     bankruptcy. They must give the             your assets, whether you are entitled
                                                                                                credit in about two year’s time.
Homestead Exemption                             There are many more changes that went           Bankruptcy is not the only method of
                                                into effect in 2005. In Chapter 13 cases,       dealing with a debt problem. In some
A major change affecting Florida debtors
as of April 20, 2005 is the limit on the
                                                a debtor may cram down an automobile
                                                loan only if she purchased the car more
                                                                                                situations, other methods might be more
                                                                                                advantageous to an individual than filing    BANKRUPTCY
homestead exemption. Debtors may use            than 910 days before filing bankruptcy.         bankruptcy. Such alternatives may
Florida exemptions as long as they have
resided in Florida for 730 days (2 years)
                                                The new law also limits the automatic
                                                stay after the court has dismissed a
                                                                                                include an out-of-court settlement with
                                                                                                creditors, reduction of payments to
                                                                                                                                               BASICS
before filing their case. With respect to       previously filed case and the debtor tries      creditors, obtaining help from a
the homestead exemption, if a debtor            to file another case within a year of the       consumer credit counseling service or
has resided in Florida for 1,215 days           dismissal.                                      payment of debts by sale of assets or
(about 3 years and 4 months) before                                                             borrowing on assets.
filing bankruptcy, she may use Florida’s        While Congress made major changes to
unlimited (as to value) homestead               bankruptcy law, people are still able to        Although you do not need an attorney to
exemption. However, if she has acquired         file bankruptcy and get protection from         file a bankruptcy petition, you should
a home within 1,215 days of filing              creditors. You should consult with an           consider seeking the advice of an
bankruptcy, her homestead exemption is          attorney before filing bankruptcy since         attorney if you are unsure of your rights
limited to $125,000 in equity (unless she       there are many changes to the law. If a         and duties under bankruptcy law.
owned a home in Florida more than               debtor does not follow the requirements
1,215 days before filing bankruptcy and         closely, the court could dismiss her            If you believe you need legal advice, call
used those proceeds to buy another              case, which can lead to loss of shelter,        your attorney. If you do not have an
home in Florida.)                               transportation and income.                      attorney, call The Florida Bar Lawyer
                                                                                                Referral Service at 1-800-342-8011, or
                    A Chapter 13                Bankruptcy and Your Credit
                    adjustment of debts
                    enables an individual       How does bankruptcy affect your credit
                    with regular income to      rating? The fact of bankruptcy is picked              Jacksonville Area Legal Aid, Inc.
                    propose in good faith to    up and noted by various commercial                         126 W. Adams Street
                    pay all or part of his or   credit reporting companies. Federal law                   Jacksonville, FL 32202             This information is provided by
                    her debts from future       limits the length of time this information                 904-356-8371                      The Florida Bar.
income over a period of time. If the court      may be carried on a report. The law also
approves the plan of payment, the debts         prevents certain governmental units and                                                      This is an informational brochure
may be settled in this manner, even if          agencies from discriminating against                                                         and is not a substitute for legal
the creditors are not willing to go along       persons who have filed bankruptcy. Most                                                      advice. The laws described here
with the plan. If the individual makes the      people find that if, after filing bankruptcy,                                                may change without notice.
payments as required, he or she will not        they promptly make the payments that
have to surrender his or her property.          they are left with such as car payments,
Unsecured debts may not exceed                  house payments, rent or utility
$307,675, generally, with a maximum of          payments, they can reestablish some
$922,975 for secured debt obligated.