Chapter 7 Bankruptcy in Miami, Florida

Chapter 7 bankruptcy is a court-supervised process under federal law that eliminates most unsecured debts in approximately four to six months. For most Miami filers, it is the fastest and least expensive path to a financial fresh start. Credit-card balances, medical bills, personal loans, deficiency balances on repossessed cars, old utility accounts, and most civil judgments are discharged at the end of the case – meaning the law forbids the creditor from ever trying to collect them again.

Because Florida's exemption laws are unusually generous, most of our Chapter 7 clients keep all of their property, including their home, their cars, their retirement accounts, and their household goods.

Who Qualifies for Chapter 7 in Florida

To file Chapter 7, an individual must satisfy two main requirements:

1. Pass the means test. The means test compares the filer's household income to the Florida median family income for the same household size. If income is below the median, the filer is presumed to qualify. If income is above the median, the filer must complete the second part of the means test, which subtracts allowed expenses to determine "disposable income." See our page on the Florida means test for a detailed explanation.
2. Complete a credit-counseling course from an approved provider within 180 days before filing. The course can be completed online and typically costs $10 to $50.

A filer must also not have received a Chapter 7 discharge within the last 8 years or a Chapter 13 discharge within the last 6 years.

What Chapter 7 Discharges – and What It Does Not

A Chapter 7 discharge eliminates personal liability for most unsecured debts, including:

• Credit-card debt
• Medical bills
• Personal loans (signature loans, payday loans)
• Deficiency balances after foreclosure or vehicle repossession
• Old utility and cell-phone accounts
• Most lawsuits and money judgments
• Older income tax liabilities that meet specific timing tests (see tax debt and bankruptcy)

Certain debts are non-dischargeable as a matter of law and survive a Chapter 7 case:

• Domestic support obligations (alimony, child support)
• Most student loans (with narrow exceptions for undue hardship)
• Recent income taxes, tax fraud, and trust-fund payroll taxes
• Debts for personal injury caused by DUI
• Criminal restitution and most government fines
• Debts not listed on the schedules in an asset case
• Debts incurred through fraud, false pretenses, or willful and malicious injury, if the creditor objects and prevails

What Happens to Secured Debts

A discharge eliminates personal liability on the debt, but it does not by itself remove a lien. If you owe money on a house or a car and want to keep the property, you generally have three options:

• Reaffirm the debt – sign a new agreement keeping the loan in place after the bankruptcy
• Redeem the property – pay the lender the current fair market value of the collateral in a lump sum
• Surrender the property and walk away with no further obligation

Many Florida courts also allow "ride-through" on real estate – you continue making payments without signing a reaffirmation, the lien remains, but personal liability is discharged. We walk through the right choice for your car and your house at the consultation. See our page on reaffirmation agreements for a full discussion.

What Happens to Your Property

The Chapter 7 trustee's job is to identify any property that is not protected by an exemption and liquidate it for the benefit of unsecured creditors. In a typical Miami consumer case, the trustee finds nothing to sell because Florida exemptions cover everything. The relevant exemptions include:

• Homestead – unlimited equity in your primary residence, subject to acreage limits (see the Florida homestead exemption)
• Personal property – $1,000 per person, plus an additional $4,000 per person if no homestead exemption is claimed
• Motor vehicle – $1,000 of equity per debtor (a married couple filing jointly gets $2,000)
• Retirement accounts – ERISA-qualified plans and IRAs are fully protected with very few exceptions
• Wages of head of family – up to $750 per week or the full amount in a single deposit period
• Tools of the trade, prescribed health aids, life insurance proceeds, and a number of other categories

For a fuller list, see our page on Florida bankruptcy exemptions.

The Chapter 7 Timeline

A typical no-asset Chapter 7 case looks like this:

• Day 0: Petition and schedules filed; automatic stay takes effect immediately, stopping foreclosures, garnishments, lawsuits, and collection calls
• Day 21-40: 341 meeting of creditors (held by video conference for most Miami cases since 2020)
• Day 60 (after the 341): Deadline for creditors to object to discharge or dischargeability
• Day 75-100: Discharge order entered by the court
• Shortly thereafter: Case closes

Where Cases Are Filed in South Florida

Chapter 7 cases for Miami-Dade residents are filed in the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division. Broward residents file in the Fort Lauderdale Division, and Palm Beach County residents file in the West Palm Beach Division. We appear in all three.

Common Reasons Chapter 7 Is the Right Tool

• You have substantial unsecured debt and no real ability to pay it back over the next several years
• Your household income is at or below the Florida median for your family size
• You do not have non-exempt assets that you are unwilling to lose
• You are not behind on a mortgage you want to save (Chapter 13 is generally better for that)
• You want the fastest possible discharge

Schedule a Consultation

If you are considering Chapter 7, call 786-522-1411 to speak directly with attorney Albert Goodwin. We will look at your income, your debts, and your assets and tell you honestly whether Chapter 7 is the right tool for your situation, what the realistic cost will be, and what the timeline looks like.