If you are drowning in debt, filing for Chapter 7 bankruptcy can provide a much-needed lifeline. Qualifying debts get wiped out in a matter of months, offering relief that can feel impossible to achieve through traditional repayment. It’s meant to provide consumers with a fresh financial start. However, there are specific rules and limitations when it comes to filing Chapter 7 bankruptcy.
You cannot discharge certain types of debt. Student loans cannot be discharged, unless you can prove undue hardship. Recent tax debts, child support, alimony, court-ordered fines, and penalties, cannot be eliminated either.
You cannot keep non-exempt property beyond certain limits. While Florida’s homestead exemption protects your primary residence if you own a second home, valuable collectibles or have significant equity in property that exceeds exemption amounts, the bankruptcy trustee can sell these assets to pay creditors.
You must wait to file again. If you have previously filed for Chapter 7 bankruptcy, you must wait eight years before you can file again.
You must disclose all assets and income. During the bankruptcy process, you must report all assets, income sources, and recent financial transactions. Transferring property to friends or family before filing, hiding income, or making false statements on your petition can have serious consequences.
You cannot incur new debt with the intention of discharging it. Racking up credit card charges or taking out loans shortly before filing bankruptcy, especially for luxury items or cash advances, can be deemed bankruptcy fraud and result in your case being thrown out.
If you have questions or are considering bankruptcy because of financial hardship, consult an experienced Miami bankruptcy attorney who can explain your options. As both an experienced CPA and a proven bankruptcy lawyer, Timothy Kingcade helps clients use bankruptcy laws to protect their assets and pursue successful outcomes. Since 1996, Kingcade Garcia McMaken has helped people from all walks of life build a stronger financial future. Our attorneys help thousands of people each year use bankruptcy protection to restart, rebuild, and recover. Once you hire our firm, we will contact your creditors to stop the harassment. You can also find helpful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
SOURCE: What can you not do in a Chapter 7 bankruptcy? – CBS News
