Miami Bankruptcy & Immigration Services is a document preparation service. We are not attorneys and we do not give legal advice. We assist people with the preparation of their documents only. Our services are of a secretarial nature and are not a substitute for the advice of an attorney. Nothing on this website is an offer for legal services.

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Purpose, Benefits & Costs of Bankruptcy

Notice mandated by 11 U.S.C. § 342(b)(1) and § 527(a)(1)

Bankruptcy is a federal court proceeding that provides relief to people and businesses having financial difficulty. The relief comes in the form of an automatic stay — which generally stops most collection proceedings and harassment from creditors. The cost of filing consists of a filing fee (varies by chapter) and, if you hire an attorney, their fee for representation. Additional costs may apply to obtain required information and documentation.

This is a brief overview only. No one should base their decision to file or not file based solely on this information. Bankruptcy is complex, and anyone considering it is encouraged to seek the advice of an experienced bankruptcy attorney.

Potential Benefits

• Discharge (eliminate) liability for most or all debts — a fresh start
• Stop foreclosure — the automatic stay freezes proceedings and provides an opportunity to catch up
• Prevent repossession of a car or other property — and can even force return of property already repossessed
• Prevent utility shut-offs — and can force reconnection of service already terminated
• Stop wage garnishments and creditor harassment
• Lower monthly payments — by altering contractual relationships with creditors, lowering or eliminating interest
• Challenge improper creditor claims — if a creditor seeks to collect more than they are entitled

Important Limitations

• Eliminate certain liens of secured creditors. Although payments may be restructured, you usually cannot keep collateral unless you continue paying the debt
• Discharge certain debts. Common exceptions include domestic support orders (child support, maintenance, alimony), most student loans, criminal fines, and most taxes
• Discharge debts incurred after filing. Bankruptcy only addresses debts existing at the time of filing
• Protect co-signers. If someone co-signed for you, they will usually be liable for any part of the loan you don't pay

Credit Counseling Requirement

With limited exceptions, 11 U.S.C. § 109(h) requires all individual debtors who file for bankruptcy relief to receive a briefing outlining available opportunities for credit counseling and assistance with budget analysis.

The briefing must be given within 180 days before the bankruptcy filing. It may be provided individually, in a group, by telephone, or over the internet — and must be provided by a nonprofit budget and credit counseling agency approved by the U.S. Trustee.

The clerk of the bankruptcy court maintains a list of approved agencies in your jurisdiction.

Bankruptcy Crimes & Access to Records

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury — orally or in writing — in connection with a bankruptcy case is subject to fine, imprisonment, or both.

All information supplied by a debtor in connection with a bankruptcy case is subject to examination by the Attorney General acting through the Office of the U.S. Trustee, the Office of the U.S. Attorney, and other components and employees of the Department of Justice.

Warning: 11 U.S.C. § 521(a)(1) requires that you promptly file detailed information regarding your creditors, assets, liabilities, income, expenses, and general financial condition. Your bankruptcy case may be dismissed if this information is not filed with the court within the time deadlines set by the Bankruptcy Code, the Bankruptcy Rules, and the local rules of the court.

Fraud & Concealment Prohibited

Notice mandated by 11 U.S.C. § 342(b)(2)

• Some or all of the information you provide in connection with your bankruptcy case will be filed with the U.S. Bankruptcy Court on forms or documents you will sign and declare as true under penalty of perjury
• A person who knowingly and fraudulently conceals assets or makes false oaths or statements under penalty of perjury in connection with a bankruptcy case shall be subject to fine, imprisonment, or both
• All information you provide is subject to examination and audit by the Attorney General of the United States

Mandatory Disclosure to Consumers

Notice mandated by 11 U.S.C. § 527(a)(2)

Please take notice that:

• All information you provide with the filing of your case, and thereafter while your case is pending, must be complete, accurate, and truthful
• You must disclose all of your assets and liabilities
• You must state the replacement value of each asset where requested, after reasonable inquiry
• Before you file, you are subject to a means test designed to determine whether you qualify for Chapter 7 — and if not, how much you must pay unsecured creditors in Chapter 13
• Any information you provide may be audited under Title 11. Failure to provide information may result in dismissal of the case or other sanctions, including criminal sanctions

What "Replacement Value" Means

• Used clothing, furniture, computers: "yard sale" value — what the used item might sell for on eBay
• Antiques, jewelry, collectibles: retail value
• Motor vehicles: third-party purchase value
• Real estate: current market value
• Cash and bank accounts: the actual amount on deposit
• Stocks and bonds: market value as of the date your case is filed

For most personal, family, or household items, replacement value means what a retail merchant would charge for "used" property similar to yours — not the price of a new item.

Bankruptcy Assistance Services

Notice mandated by 11 U.S.C. § 527(b)

If you decide to seek bankruptcy relief, you can represent yourself, hire an attorney to represent you, or — in some localities — get help from a bankruptcy petition preparer who is not an attorney.

THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THEY WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.

The following helps you understand what must be done in a routine bankruptcy case — to help you evaluate how much service you need:

• Before filing, either you or your attorney should analyze your eligibility for different forms of debt relief and which is most beneficial for you
• To file, you need to prepare a Petition, Schedules, Statement of Financial Affairs, and in some cases a Statement of Intention — correctly — and file them with the bankruptcy court
• You will have to pay a filing fee to the court
• After filing, you must attend the required first meeting of creditors where you may be questioned by a court official called a "trustee" and by creditors
• If you file Chapter 7, a creditor may ask you to reaffirm a debt. A creditor is not permitted to coerce you into reaffirming debts
• If you file Chapter 13, you may also want help preparing your Chapter 13 plan and with the confirmation hearing before a bankruptcy judge