Solomita Law, PLLC
Solomita Law, PLLC
  • 12001 Research Parkway
    Suite 236
    Orlando, FL 32826
  • Call For A Consultation!

    (407) 305-5599

How Serious Does My Debt Have To Be To Consider A Chapter 7 Bankruptcy?

This is a good question that results in a singular answer: Every debt is different, and every person’s situation is different.

Our office has seen clients with less than $10,000 of debt who desperately needed chapter 7 relief. If you are on a fixed income and will be left in a continuously bad situation by trying to pay your debt, Chapter 7 bankruptcy may be a good option for you.

We have also seen clients with $30,000-$40,000 in debt that we have advised to avoid bankruptcy. Depending on your situation, you may be able to find a way (outside of bankruptcy) to relieve your debt.

There are many reasons why we may advise our clients to one end or another because to be clear, anybody can file bankruptcy.

There’s no threshold of debt to file for bankruptcy. Why would you choose to file and if it is the best decision in your situation is what truly matters. Everyone has a tipping point.

We’ve seen clients who are making six figures but are unable to get anywhere with the debt they have incurred. We’ve also seen clients whose income won’t qualify them for a chapter 7 filing, while their debt isn’t large enough to necessarily justify filing a chapter 13 bankruptcy.

These specifics are all different for each and every person, and our office is committed to going over all the factors of your unique case to determine what might be the best option for you.

In Florida, we have the Homestead Exemption, which protects your home. Because of this most people aren’t going to lose their homes by filing a bankruptcy. However, if you own a car or have a savings account, there may be a chance that you won’t be able to keep that car or you may lose some of the funds in your savings account.

What Type Of Debt Typically Is Going To Be Dischargeable In A Chapter 7 Bankruptcy?

The most common types of dischargeable debt in a chapter 7 bankruptcy are credit card debt and medical debt.

While credit card debt is by far the most common kind of debt seen by our office, medical debt is similarly relevant due to the high cost of healthcare in America. Even when a person is covered by health insurance, they may not be able to cover their out-of-pocket costs. If a person is dealing with an illness that requires long-term care, it is especially common for them to seek a chapter 7 filing.

Another frequently-seen dischargeable debt arises when a client voluntarily surrenders a vehicle or has had a vehicle repossessed.

When you give back a car or that is taken from you, you are not released from your obligation to pay the remaining debt to the company that lent you money for the vehicle. In turn, the company will auction off the vehicle (generally at a lower price than it is worth), and you will owe what is called a “deficiency balance”. This deficiency balance will be in a total of the debt and interest that you owed at the time of the repossession or return, minus the amount that the car was sold for at auction.

Some other dischargeable debts:

  • Most cash advances or personal loans
  • Old utility bills
  • Some attorney’s fees, depending upon how they’re classified.
  • foreclosures

For more information on Bankruptcy Law in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 305-5599today.

Alec Solomita, Esq.

Call For A Consultation
(407) 305-5599

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