For many people facing high medical bills, Chapter 7 bankruptcy can offer the most straightforward path to debt relief. Often called “liquidation bankruptcy,” Chapter 7 is designed for individuals with limited assets and income who cannot realistically pay off their debt. In Florida, filing for Chapter 7 allows you to discharge unsecured debts, including medical debt, credit card debt, and personal loans, in a matter of months.
To qualify for Chapter 7 in Florida, you’ll need to pass the means test, which determines eligibility based on your income and household size. If your income is below Florida’s median income level for your family size, you likely qualify for Chapter 7. If you pass, you may be able to discharge all medical debts and start fresh without monthly payments.
For those who don’t qualify for Chapter 7 due to higher income or who want to retain certain assets, Chapter 13 bankruptcy offers another option. Chapter 13 is a “reorganization” bankruptcy that allows debtors to restructure their debt into a manageable repayment plan, which lasts three to five years. Medical debt, along with other unsecured debts, is included in the repayment plan.
In Florida, Chapter 13 allows you to pay a portion of your medical debt based on your income and expenses. After successfully completing the repayment plan, any remaining unsecured debt, including medical debt, is typically discharged. This option is especially beneficial if you’re trying to protect certain assets or if you have regular income but are struggling to meet all your debt obligations.
One of the unique aspects of filing for bankruptcy in Florida is the state’s strong asset exemptions. Florida allows for a homestead exemption that protects the equity in your primary residence, as long as it meets certain requirements. This means that, in most cases, filing for bankruptcy will not put your home at risk, even if you have high medical debt.
Additionally, Florida exemptions include certain amounts for personal property, such as household items, vehicles, and retirement accounts. These exemptions protect your essential assets from liquidation, making bankruptcy a more viable option for those with medical debt. Working with a bankruptcy attorney can help you understand which exemptions apply to your specific situation and ensure you maximize these protections.
Bankruptcy laws are complex, and Florida’s specific exemptions and procedures require careful attention to detail. An experienced bankruptcy attorney can guide you through the filing process, help you determine which type of bankruptcy best suits your situation, and ensure you’re maximizing asset protections. Additionally, an attorney can handle any challenges or objections from creditors, making the process smoother and helping you avoid mistakes that could delay or jeopardize your case.
For more information or to schedule a consultation to discuss your situation, contact the Law Offices of Robert M. Geller.
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