Florida Bankruptcy: How Do You Qualify for Chapter 7 and 13?

Deciding to file for bankruptcy can be terrifying – But, under the right circumstances, it can provide incredible financial relief. The most common types of bankruptcy in Florida are Chapter 7 & 13.

By the time you’re finished reading, you’ll have the basic answers to “How do you qualify for Chapter 7 and Chapter 13 in Florida?” If you require more personalized information, we can help. Contact the Attorney Debt Fighters today to discuss your financial goals and whether or not bankruptcy is the right option. 

Introduction to Bankruptcy in Florida

Bankruptcy Types and Purposes

Chapter 7 is the most popular form of bankruptcy and Chapter 13 is the second most common. They can both be used to repair your finances, but they serve different purposes:

• Chapter 7 Bankruptcy: Also called a “liquidation bankruptcy.” This allows the filer to “discharge” (cancel) most of their unsecured debts. It’s generally much faster than other options and designed for people with few assets and limited income. The requirements to file bankruptcies under Chapter 7 include passing the means test which examines your income and financial situation to make sure you meet the income requirements to file Chapter 7.
• Chapter 13 Bankruptcy: This is more of a “reorganization bankruptcy” that allows debtors to create a debt repayment plan (subject to approval). It’s best for those who want to keep their assets while repaying all or part of their debts over a 3-5 year span. However qualifications to file for bankruptcy under Chapter 13 include having a steady income to support the repayment plan.

Differences Between Chapter 7 and Chapter 13

Both options can help filers eliminate debts, but they take very different approaches to that goal. Chapter 7 totally eliminates qualifying debts without the need to repay them. On the other hand, Chapter 13 allows you to restructure your debts and make manageable payments over time. Once you have completed the plan all of the remaining qualifying debts are canceled. 

So, what are the qualifications to file bankruptcy under Chapter 7 or Chapter 13?

If you want to know how to qualify for either option, you’ll need an in-depth understanding of:

• Your income
• Your assets
• The types of debt you hold 

Continue reading to learn more about the requirements to file bankruptcy in Florida. 

Qualifications for Chapter 7 Bankruptcy

Eligibility and Means Test – Do I Qualify to File Chapter 7? 

Determining whether you can file Chapter 7 requires you to pass the Chapter 7 means test – Which is a ‘test’ used to compare your income to the median income in Florida. If your income falls below the state median, then you qualify automatically. 

If it’s higher than the median, you’ll have to conduct more calculations to determine if your disposable income (money left after paying taxes and essential bills) can be sufficient to pay the entirety or a portion of your debt. 

Here’s a bit more information about the qualifications for bankruptcies under Chapter 7:

• The means test focuses on the last six months of your income 
• If your income is below the state median, you meet the basic qualifications to file Chapter 7.
• If your income goes above the median, you may still qualify to file Chapter 7 after deductions for your expenses (i.e., housing, utilities, food, etc.). 

Dischargeable vs. Non-Dischargeable Debts

In terms of bankruptcy, not all debts are created equal. Most unsecured debts, like your credit card balances and medical bills are eligible for discharge – But certain debts can’t be eliminated. 

Non-dischargeable debts under Chapter 7 bankruptcy include: 

• Student loans (except for rare cases)
• Child support and alimony
• Certain tax debts
• Legal obligations (i.e., court fines, criminal restitution)
• Debts from certain types of personal injury claims 

In some cases, answering “what are the requirements for Chapter 7 bankruptcy” isn’t as cut and dry – Especially for those with more complicated finances. In these situations, our Florida bankruptcy attorneys are here to help. 

Give us a call today to discuss your finances and best debt relief options for your circumstances. 

Requirements to File Chapter 13 Bankruptcy

Debt and Income Requirements

Chapter 13 isn’t for everyone. As such, there are both income and debt limitations that you should consider before starting the process:

• As of 2024, a person filing for Chapter 13 bankruptcy must have secured debts and unsecured debts combined that are less than $2,7500,000
• Filers must have a consistent source of income that could be used to fund a feasible repayment plan
• Up to date tax filing 
• No recent bankruptcy discharges within the last 180 days based on inability to appear or abide with court order 

Repayment Plan Framework

The most essential aspect of Chapter 13 bankruptcy is creating a payment plan that fits your income and debt levels. Generally, the plan must:

• Span three to five years
• Account for your “priority debts” like taxes and child support 
• Offer reasonable payments to your creditors (based on disposable income)

If your payment plan isn’t feasible, it may be rejected by a bankruptcy judge or your creditors. 

Bankruptcy Filing Process

What Information Do You Need to File Bankruptcy? Documentation and Filing Steps 

Although Chapter 7 and 13 have different requirements, each require filers to submit an extensive amount of financial documentation, which includes:

• A list of your creditors and how much you owe them
• Details about your income, total expenses, and assets. 
• Recent tax returns

Your filing doesn’t officially start until you’ve submitted this information to the bankruptcy court. If you’re unsure of what information you need to file for bankruptcies under your circumstances, that’s okay – Give us a call to schedule a free consultation and we’ll help you sort it out. 

Credit Counseling and Debtor Education

Bankruptcy is all about making a fresh financial start, but the government wants to ensure you have a certain level of financial literacy before they allow you to file. This requires completing mandatory credit counseling course within 180 days before you file Chapter 7 or Chapter 13. 

Further, after filing, you’ll also need to complete a debtor education course before receiving a full discharge. 

Exemptions and Legal Protections

Asset Exemptions in Florida

When filing bankruptcy, you can use federal exemptions or the exemptions provided by the state you reside. Generally, Florida offers very generous exemptions for personal property – Which allows you to keep certain assets when filing under Chapter 7.

Some of the most common exemptions include: 

• Homestead exemption: Protects your primary residence (i.e., the home you live in)
• Personal property: Protects up to $1,000 of personal belongings ($4,000 if you’re not claiming the homestead exemption).
• Vehicle exemption: Protects up to $1,000 in vehicle equity. This allows you to keep your car if your ownership stake (after subtracting any loans you owe on it) is $1,000 or less. 

These exemptions are an absolutely crucial part of understanding how Chapter 7 works in Florida as well as the various qualifications for Chapter 7. 

Creditor Safeguards and Automatic Stay

One of the most effective protections offered to debtors filing bankruptcy in Florida is the “automatic stay.” This is a court order that puts an immediate stop to all debt collection activities – That includes stopping foreclosure proceedings, wage garnishment, debt collection calls, and more. This remains in effect throughout the entirety of your bankruptcy case in order to give filer enough breathing room to manage their debts. 

Debunking Bankruptcy Myths

Bankruptcy is one of the most misunderstood legal concepts – Even the thought of filing often results in fear and confusion. Here are some of the most common misconceptions and the truth behind them: 

• Myth 1: Your credit will improve following filing. The effect from bankruptcy is impact on credit ratings immediately but it is not permanent. Many people begin to rebuild their credit within a year of declaring bankruptcy. 
• Myth 2: You lose all your property. State and federal exemptions can safeguard your assets essential to Chapter 7 as well as retain your property even after you file Chapter 13.
• Myth 3: Only the irresponsible are able to file for bankruptcy. Many cases of financial hardship are unexpected (i.e., lost job, medical emergencies, etc.) – It’s something that can happen to anyone.

Understanding the truth about bankruptcy can help to alleviate a lot of stress and confusion while you consider the best steps to fix your finances. 

Contact Ziegler Diamond Law Today

Filing bankruptcy is a serious decision – but it can offer unrivaled financial relief. Whether you’re considering Chapter 7 or curious about the requirements to file Chapter 13 bankruptcy, it’s important to know your options. 

Contact the best bankruptcy lawyers in Florida today at Attorney Debt Fighters to discuss your situation and best debt relief options available to you.

Michael Ziegler Managing Partner

Michael Ziegler is the managing partner of Ziegler Diamond Law, serving consumers throughout Florida. With a focus on consumer protection, Michael helps clients navigate bankruptcy, defend against debt collection lawsuits, and address credit reporting errors. Known for his strategic approach and dedication to empowering individuals to regain financial control, Michael also chairs the Clearwater Bar Association's Small Firm section. Outside the office, he enjoys camping with his family and pursuing real estate ventures.

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