How Much Does It Cost To File Bankruptcy In Florida?

We Are going to see How Much Does It Cost To File Bankruptcy In Florida, If you’re grappling with financial difficulties and contemplating bankruptcy in Florida, understanding the associated costs is crucial.

While bankruptcy isn’t a low-cost solution, it can offer a fresh start and relief from debt pressures.

However, before proceeding, it’s essential to grasp the nuances of Chapter 7 and Chapter 13 bankruptcy, the prevalent options for individuals, comprehending the related filing and attorney fees, and exploring alternative avenues.

This article will delve into the fundamentals of Chapter 7 and Chapter 13 bankruptcy, elucidating their differences and applications.

Additionally, it will delineate the expenses linked with filing, including court fees and attorney charges, while shedding light on the variables influencing these costs.

Furthermore, practical insights will be provided on mitigating bankruptcy expenses and locating a reputable bankruptcy attorney in Florida.

An image of Filing Bankruptcy in Florida
While bankruptcy isn’t a low-cost solution, it can offer a fresh start and relief from debt pressures.

Chapter 7 and Chapter 13 bankruptcy

Chapter 7 bankruptcy, often called liquidation bankruptcy, offers a way to wipe out many unsecured debts like credit cards and medical bills.

Yet, you might need to sell off nonessential assets such as jewelry or stocks to repay creditors.

While it’s typically quicker and cheaper than Chapter 13, it can impact your credit score more negatively, making future credit harder to come by.

Passing a means test comparing your income to your state’s median is required to qualify.

On the other hand, Chapter 13, known as reorganization bankruptcy, lets you retain most assets while setting up a repayment plan to settle debts over three to five years.

This can help catch up on missed payments, lower interest rates, and prevent foreclosure or repossession.

Plus, it shields co-signers from debt liability. However, it’s more intricate and costly than Chapter 7, demanding a steady income and sufficient disposable income to meet monthly payments.

Eligibility requires having under $419,275 in unsecured debts and less than $1,257,850 in secured debts.

Filing fees and attorney fees

In Florida, bankruptcy filing encompasses various costs, primarily filing fees and attorney fees.

Here’s a breakdown of the current fees for Chapter 7 and Chapter 13 bankruptcy:

Filing fees: These are mandatory payments to the court upon filing your bankruptcy petition.

For Chapter 7, the fee stands at $338, while for Chapter 13, it’s $313. Qualifying individuals with income below 150% of the federal poverty level may seek fee waivers or installment plans.

Attorney fees: These cover the services provided by your bankruptcy lawyer.

Chapter 7 attorney fees typically range between $1,162 and $3,000, contingent on factors like case complexity, location, and your attorney’s expertise.

For Chapter 13, fees may vary from $3,500 to $4,000, depending on the district and workload. Negotiating a lower fee or a payment plan is possible, but be sure to consider the lawyer’s quality and reputation.

Aside from filing and attorney fees, additional expenses such as credit counseling courses and credit reports may arise during your bankruptcy proceedings in Florida.

Therefore, it’s crucial to weigh the advantages and disadvantages of bankruptcy thoroughly, exploring alternative options before making a decision.

Utilizing a free Florida bankruptcy cost calculator tool can help estimate bankruptcy costs specific to your zip code.

Credit counseling and credit score

Before and after filing for bankruptcy in Florida, credit counseling and credit score management are pivotal.

Here’s a breakdown to guide you:

Credit counseling: Per the U.S. Bankruptcy Code, completing a credit counseling course from an approved provider within 180 days before filing your bankruptcy petition is mandatory.

This course aids in assessing your financial situation, exploring alternatives to bankruptcy, and devising a personal budget plan.

Upon completion, you’ll receive a certificate to include with your petition. Courses are available online, by phone, or in person, typically costing between $10 and $50. For a list of approved credit counseling agencies in Florida, refer to my internal tool.

Credit score: Filing bankruptcy adversely affects your credit score, though the severity varies based on your current score, bankruptcy type, and post-bankruptcy financial management.

On average, expect a credit score drop of at least 140 points. However, bankruptcy eliminates most debts, improving your debt-to-income ratio and reducing credit utilization.

Over time, you can rebuild credit by timely bill payments, maintaining low balances, and judiciously applying for new credit.

Bankruptcy remains on your credit report for 10 years with Chapter 7 or 7 years with Chapter 13.

Bankruptcy impact on credit score

An Infographic of Bankruptcy Impact on Credit Score
An Infographic of Bankruptcy Impact on Credit Score

Facing bankruptcy can deal a hefty blow to your credit score, signaling struggles in meeting debt obligations.

The extent of this impact hinges on various factors, including the bankruptcy type, discharged debt volume, and pre-filing credit score.

Generally, a higher pre-bankruptcy score correlates with a more pronounced drop.

As per FICO, the mastermind behind widely used credit scores, filing bankruptcy could slash over 200 points from a stellar score of 700 or higher.

For those hovering around 680, anticipate a dip of 130 to 150 points.

A Chapter 7 bankruptcy, erasing most debts, lingers on your credit report for a decade from the filing date.

Conversely, a Chapter 13 bankruptcy, involving a repayment blueprint, remains on record for 7 years.

Over time, the bankruptcy’s credit score impact diminishes, particularly with prudent credit practices: timely bill payments, low credit utilization, and credit mix diversification. Yet, full recovery to a good or excellent score range may span several years.

Bankruptcy Exemptions in Florida

Bankruptcy exemptions are legal safeguards shielding specific assets from seizure by creditors or the bankruptcy trustee when filing for bankruptcy.

In Florida, federal bankruptcy exemptions aren’t applicable; residents must adhere to state regulations.

Common bankruptcy exemptions in Florida encompass:

  1. Homestead exemption: Safeguards limitless equity in your primary residence, provided it doesn’t exceed half an acre within a municipality or 160 acres elsewhere.
  2. Personal property exemption: Shields up to $1,000 worth of personal belongings like furniture, apparel, and appliances. If foregoing the homestead exemption, this extends to $4,000.
  3. Vehicle exemption: Preserves up to $1,000 in equity for one motor vehicle.
  4. Wage exemption: Safeguards earnings of up to $750 per week or 30 times the federal minimum wage, whichever is greater.
  5. Retirement account exemption: Protects various retirement funds like IRAs, 401(k)s, and pensions, irrespective of their value.
  6. Additional exemptions: Includes safeguarding certain benefits, insurance, alimony, child support, and miscellaneous assets.

Leave a Comment