Frequently Asked Questions (FAQ)

What is a Debtor?
In its most basic form, a debtor is a person who owes someone else money. A creditor is the person who is owed money. For example, If John loans Mary fifty dollars, then John is the creditor of Mary, and Mary is the debtor or John.

What is Bankruptcy?
Bankruptcy is the legal method for a debtor to "discharge" or relieve personal liability on debts that you owe. While no debtor is guaranteed a total discharge of his debt, most debtors who file for bankruptcy are given such relief. One of the primary purposes of the bankruptcy laws is to relieve the honest debtor from the weight of oppressive indebtedness and to provide the debtor with a fresh start.

Who can file for bankruptcy?
Any person can file for bankruptcy protection from creditors. In addition, most businesses and charitable organizations may also qualify for bankruptcy protection.  You may only discharge your debt in a Chapter 7 case once every 8 years, but you may file a Chapter 13 case even if you have been granted a Chapter 7 discharge in the last 6 years.

What happens to my bills after I file for bankruptcy?
As soon as your case is officially filed with the court, creditors are legally prevented from attempting to collect on any debt owed to them by you. This means that creditors must stop all collection activity, including: telephone calls, harassing letters, repossessions, foreclosures, lawsuits, and wage garnishments. Once the case is concluded, the court may enter a "discharge". A discharge is a total release of a debtor from any further personal liability for most if not all of his or her pre-bankruptcy debts.

What is the difference between Chapter 7, 11, and 13 bankruptcy?
In a typical Chapter 7 bankruptcy (also known as liquidation), a trustee collects the nonexempt property of the debtor, converts the property to cash, and distributes the cash to the creditors. In contrast, Chapters 11, 12, and 13 of the Bankruptcy Code contemplate debtor rehabilitation. In a rehabilitation case, creditors look to future earnings of the debtor, not to the current property of the debtor. Under rehabilitation, a debtor will generally retain his assets and property, while making payments to creditors pursuant to a court approved plan.

Will filing bankruptcy effect my credit rating?
Unfortunately it will. However, most individuals are able to rebuild their credit within a few years. If you are currently contemplating bankruptcy, then it is likely that your current credit rating has already been effected. A discharge of your current debt may provide the opportunity to rebuild your credit with steady, regular payments on a new account.

How long will a bankruptcy show on my credit reports?
The Fair Credit Reporting Act prohibits the reporting of outdated information about consumers. With a few exceptions, credit-reporting agencies can only disclose a bankruptcy during the first ten years following a filing.

Will I lose my house, car, and other personal property?
Not necessarily, Florida has laws that determine which items or property are exempt from being taken away. Homesteads of certain sizes are exempt in Florida.  Personal items such as furniture and clothing are exempt up to $1,000.00. There are also many other categories of property that are exempt in Florida.  We will review your property and discuss how bankruptcy would affect keeping your property at your FREE INITIAL CONSULTATION.

Should I file for bankruptcy?
There is never a quick answer to this question. Generally, if you can pay off your debts within three to five years then filing for bankruptcy is not a good idea. If this is not possible, then filing may be a viable solution to eliminate your financial obligations.

Last update:  2/1/2018

The information at this site has been prepared by, or on behalf of, Karin A. Garvin, ESQ., for general informational purposes only. It does not constitute legal advice and is presented without any representation or warranty whatsoever, including as to the accuracy and/or completeness of the information. No one should, or is entitled to, rely in any manner on any of the information at this site. Parties seeking advice should consult with legal counsel.

"We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code."