The most common type of bankruptcy for individuals. Sometimes called "liquidation" or a "fresh start" bankruptcy. Here's how the process works.
Chapter 7 is a legal process that helps people who cannot pay their debts get a "discharge" — meaning most unsecured debts are eliminated. It's typically used by people with limited income and few assets.
A court-appointed trustee can sell any non-exempt assets to pay creditors. Most Chapter 7 cases are "no-asset" cases — meaning there is nothing to sell, and the filer keeps everything they own (thanks to Florida's exemptions).
The whole process usually takes about 3 to 4 months from filing to discharge.
A Chapter 7 case begins when you file a petition with the bankruptcy court serving the area where you live. Along with the petition, you must also file several supporting documents:
A husband and wife may file a joint petition or individual petitions.
To complete the official bankruptcy forms that make up the petition and schedules, you will need:
A complete list of all creditors, with the amount and nature of each claim.
The source, amount, and frequency of your income.
A list of all property you own — real estate, vehicles, bank accounts, personal items.
A detailed list of your monthly living expenses — food, clothing, shelter, utilities, taxes, transportation, medicine, and similar items.
The moment a Chapter 7 petition is filed, an automatic stay goes into effect. This protection arises by law — no court order is needed.
While the stay is in effect, creditors generally cannot:
Creditors normally receive notice of the filing from the clerk of the court.
Federal bankruptcy law allows you to protect certain property from creditors — either under federal exemptions or under your home state's exemption law.
Florida has adopted its own exemption law in place of the federal exemptions. That means whether specific property is exempt depends on Florida law — including Florida's homestead exemption, personal property exemptions, and retirement account protections.
Because exemption rules are complex and fact-specific, legal counsel should be consulted to determine how Florida law applies to your situation.
A meeting of creditors (also called the "341 meeting") is usually held 20 to 40 days after the petition is filed.
You must attend this meeting. Creditors may appear and ask questions about your financial affairs and property. The trustee also attends.
At the meeting, the trustee is required to examine you orally to ensure you are aware of the potential consequences of seeking a discharge in bankruptcy — including:
It is important to cooperate with the trustee and provide any financial records or documents requested.
If your situation changes, the Bankruptcy Code allows you to convert a Chapter 7 case to a Chapter 11 reorganization or a Chapter 13 case — as long as you meet the eligibility requirements for the chapter you want to convert to.
A case cannot be converted repeatedly from one chapter to another. If a Chapter 13 payment plan is entered, plan payments may be deducted directly from your paycheck — a practice that increases the likelihood that payments will be made on time and the plan completed.
The court charges filing fees when a Chapter 7 petition is submitted. Current amounts change periodically — always check with the bankruptcy court for the current fee schedule before you file.
With the court's permission, individual debtors may pay filing fees in installments (typically up to 4 payments). The final installment is due no later than 120 days after filing, though the court may extend that for cause up to 180 days.
If a joint petition is filed, only one set of fees is charged. Failure to pay fees may result in dismissal of the case.
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Typically 3 to 4 months from filing to discharge. The 341 meeting usually happens 20 to 40 days after filing.
Usually not. Florida has generous exemptions that protect a primary residence (up to a limit) and a vehicle. Every case is different — consult a licensed attorney about your specific situation.
Chapter 7 stays on your credit report for up to 10 years. However, many people begin rebuilding credit within 1 to 2 years after discharge.
You are not required to have an attorney to file bankruptcy. However, we are not attorneys — if you need legal advice about your specific situation, you should consult a licensed attorney.
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