Chapter 7 — Liquidation Bankruptcy

Chapter 7 Bankruptcy in Florida — The Complete Guide

Chapter 7 bankruptcy is the most common form of bankruptcy filed in the United States — and in Florida, it is particularly powerful because Florida's state exemptions protect most of what people own. A typical Chapter 7 case takes 3 to 6 months from filing to discharge, costs $338 in court fees, and wipes out most unsecured debt permanently.

What Chapter 7 Does

Chapter 7 eliminates most unsecured debts through a legal process called "discharge." Once your debt is discharged, it is gone permanently — creditors can no longer legally collect it, call you, sue you, or garnish your wages for that debt. The automatic stay, which goes into effect the instant you file, stops virtually all collection actions immediately, including wage garnishments, foreclosure sales, repossessions, lawsuits, and creditor calls.

Eligibility — The Means Test

Do You Qualify? — Florida's Chapter 7 Means Test

Congress added the means test in 2005 to prevent higher-income filers from using Chapter 7. The test has two parts. Most Floridians pass Part 1 easily; if not, Part 2 looks at your actual expenses versus your income to determine whether you have disposable income to pay creditors.

Part 1 — The Florida Median Income Comparison

Average your monthly household income over the last 6 full calendar months, then multiply by 12 to get an annual figure. Compare that to Florida's current median income for your household size. If you are at or below the median, you pass the means test and qualify for Chapter 7 automatically.

Add approximately $11,100 per person for households larger than 4. These thresholds update every 6 months — verify current figures at the U.S. Trustee Program website before filing.

Part 2 — The Full Means Test (for above-median filers)

If your income exceeds the median, you take the full means test. You subtract allowed expenses — set by IRS national and local standards for housing, transportation, food, healthcare, and other necessities — from your average monthly income. The result is your "disposable income."

• If 60 months of disposable income is less than approximately $9,075 — you qualify
• If 60 months of disposable income exceeds approximately $15,150 — you generally do not qualify and must use Chapter 13
• If the figure is between those amounts, additional calculations determine eligibility
• Tip: If your primary debts are business debts (not consumer debts), you may be exempt from the means test entirely
• Tip: Disabled veterans whose debts arose primarily during active duty may also be exempt from the means test

Step-by-Step Process

How to File Chapter 7 in Florida — 8 Steps

• 1

  Take the credit counseling course (before you file)

  You must complete a U.S. Trustee-approved credit counseling course within 180 days before filing. The course typically takes about 1 hour and costs $10–$50. It can be done online, by phone, or sometimes in person. Free or reduced-cost courses are available if your income is below 150% of the federal poverty line. Keep your completion certificate — you must submit it with your bankruptcy petition.

• 2

  Gather your financial documents

  You need: pay stubs for the last 60 days, tax returns for the last 2 years, bank statements for 3–6 months, a complete list of all debts (creditor names, account numbers, balances), a list of all assets and their values, and documentation of monthly expenses. The more organized you are at this stage, the smoother the rest of the process goes.

• 3

  Complete the bankruptcy petition and schedules

  The bankruptcy petition package includes more than 20 official federal forms covering your income, expenses, assets, debts, and financial history. The total package can be up to 70 pages. Every creditor must be listed — debts you fail to list may survive the bankruptcy. Consider using Upsolve.org (free nonprofit tool) or an attorney to prepare these forms.

• 4

  File your petition with the U.S. Bankruptcy Court

  File in the district serving your county. The filing fee is $338 — payable by money order or cashier's check (most courts do not accept cash or personal checks). If you cannot afford the fee, you can apply to pay it in installments (up to 4 payments over 120 days) or request a fee waiver if your income is below 150% of the federal poverty guideline.

• 5

  The automatic stay goes into effect immediately

  The moment your case is filed, an automatic stay (11 U.S.C. §362) stops virtually all collection actions. Creditors must immediately cease calls, letters, lawsuits, wage garnishments, and foreclosure actions. If a creditor violates the automatic stay after being notified of your filing, they can be sanctioned by the court.

• 6

  Attend the 341 meeting of creditors

  Within 20–40 days of filing, you must attend the 341 meeting (named for the Bankruptcy Code section). This is not a courtroom hearing — there is no judge. A bankruptcy trustee will ask you questions under oath about your petition, assets, and financial situation. The meeting usually takes 5–10 minutes in a conference room or, increasingly, by phone or video. Bring your photo ID and Social Security card.

• 7

  Complete the debtor education course

  Before you can receive your discharge, you must complete a second U.S. Trustee-approved course called the "debtor education" or "financial management" course. Like the pre-filing course, it takes about 1–2 hours and costs $10–$50. Fee waivers are available. You must file the completion certificate with the court.

• 8

  Receive your discharge

  If no creditor or trustee objects, the court will issue your discharge approximately 60–90 days after your 341 meeting. The discharge order permanently eliminates all dischargeable debts. You are then free from those obligations forever. The entire process from filing to discharge typically takes 3–6 months.

What You Keep — Florida's Chapter 7 Exemptions

Florida is an "opt-out" state — you must use Florida's state exemptions, not the federal exemption set. Florida's exemptions are among the most generous in the country. Most Chapter 7 cases in Florida are "no-asset" cases: the trustee finds nothing to sell because everything the filer owns is protected by an exemption.

• Your home: Unlimited equity if you qualify for the homestead exemption (see Article 3)
• Your car: Up to $5,000 in vehicle equity (Fla. Stat. §222.25(1))
• Personal property: Up to $1,000 (or $4,000 wildcard if you don't claim homestead) (Fla. Stat. §222.25(4))
• Retirement accounts: Fully exempt — 401(k), IRA, pension, 403(b), SEP, SIMPLE
• Head of household wages: Fully exempt from garnishment (Fla. Stat. §222.11)
• Other wages: Up to $750 per week in disposable income protected
• Life insurance cash value: Fully exempt
• Social Security, unemployment, disability, veterans benefits: Fully exempt
• Workers' compensation: Fully exempt
• Tenancy by entirety: Joint marital property is protected from individual spouse's debts
• Florida does not allow federal exemptions. You cannot mix and match Florida and federal exemptions.
• You must have been domiciled in Florida for at least 730 days (2 years) before filing to use Florida exemptions. If you recently moved, your prior state's exemptions may apply.

Chapter 13 — Reorganization Bankruptcy

Chapter 13 Bankruptcy in Florida — Save Your Home & Restructure Your Debt

Chapter 13 bankruptcy lets you keep all your property — including your home — while paying back some or all of your debt through a court-approved 3–5 year repayment plan. It is the right choice when you earn too much to qualify for Chapter 7, when you are behind on mortgage payments and want to stop foreclosure, or when you have non-exempt property you want to protect.

Chapter 7 vs. Chapter 13 — Key Differences

Who Can File Chapter 13?

Chapter 13 Eligibility Requirements

Chapter 13 is the "wage earner's bankruptcy." Congress designed it for people with regular income who can afford some repayment but need relief from the full burden of their debt. Unlike Chapter 7, there is no means test income cap — but you must have a regular, stable income sufficient to fund a repayment plan.

• Regular income required. This includes wages, salary, self-employment income, Social Security, pension, rental income, or even regular gifts from a family member. The key is that the income is stable and predictable enough to fund a monthly plan payment.
• Debt limits apply. As of 2025, Chapter 13 has debt limits that are updated periodically. For cases filed in 2025–2026: secured debt (mortgages, car loans) and unsecured debt (credit cards, medical bills) limits both apply. The specific amounts are adjusted under 11 U.S.C. §109(e) — verify current limits at uscourts.gov before filing.
• Tax filings must be current. You must have filed all required federal and state tax returns for the 4 years before filing. If you have unfiled returns, get them filed before filing Chapter 13.
• No prior Chapter 13 discharge within 2 years. Or Chapter 7 discharge within 4 years (with exceptions for those who paid 70%+ of unsecured creditors in the prior Chapter 13).
• Businesses (corporations, LLCs) cannot file Chapter 13. It is available only to individuals.

The Repayment Plan

How the Chapter 13 Repayment Plan Works

Your Chapter 13 plan is a detailed document proposing how you will pay your creditors over 3–5 years. The plan must treat different classes of creditors differently — some must be paid in full, some partially, and some may receive nothing from the plan.

Priority Debts — Must Be Paid in Full

Certain debts receive "priority" under the Bankruptcy Code and must be paid 100 cents on the dollar through your Chapter 13 plan, even if you cannot fully pay other debts. These include:

• Child support and alimony arrears (domestic support obligations)
• Most income tax debts from the last 3 years
• Your attorney's fees (Chapter 13 attorneys are typically paid through the plan)
• Your Chapter 13 trustee's administrative fee (approximately 10% of plan payments)

Secured Debts — Mortgage Arrears

One of Chapter 13's most powerful features: if you are behind on your mortgage, you can cure the arrears (catch up on missed payments) through your Chapter 13 plan while maintaining regular ongoing mortgage payments outside the plan. The automatic stay prevents any foreclosure sale from proceeding once you file. As long as you complete your plan and stay current on both the plan payments and your ongoing mortgage, you keep your home.

Lien Stripping — Eliminate Second Mortgages

If your home is worth less than what you owe on your first mortgage, a second mortgage or home equity loan has no secured value and can be "stripped" — reclassified from a secured debt to an unsecured debt. At the completion of your plan, the stripped lien is discharged. This is one of Chapter 13's most valuable tools for homeowners who are deeply underwater.

How Long Is the Plan?

If your average monthly income is below the Florida median for your household size, your plan must last at least 3 years. If your income is at or above the median, your plan must last 5 years. The plan may not exceed 5 years under any circumstances. During the plan period, you must make all plan payments on time. Missing payments is the most common reason Chapter 13 cases are dismissed.

Filing Process

How to File Chapter 13 in Florida — Key Steps

• 1

  Credit counseling (same as Chapter 7)

  Complete a U.S. Trustee-approved credit counseling course within 180 days before filing. You must submit the certificate of completion with your petition.

• 2

  Draft your Chapter 13 plan

  Your plan must specify how much you will pay each month, how long the plan will last, and how each class of creditors will be treated. This is the most technically complex part of Chapter 13 and the primary reason most filers use an attorney. An incorrect or unconfirmable plan means your case will not proceed.

• 3

  File the petition and plan with the bankruptcy court

  Filing fee is $313. The automatic stay goes into effect immediately, stopping foreclosure and other collection actions. You must begin making plan payments within 30 days of filing, even before the plan is confirmed by the court.

• 4

  341 meeting of creditors

  Same as Chapter 7 — a meeting with the Chapter 13 trustee (not a judge) within 20–40 days of filing. Creditors may also appear and object to the plan.

• 5

  Plan confirmation hearing

  A bankruptcy judge reviews your plan and, if it meets all legal requirements, confirms (approves) it. Creditors can object before confirmation. The confirmation hearing is typically 1–3 months after filing.

• 6

  Complete the plan (3–5 years)

  Make all required plan payments on time every month for the full plan period. The Chapter 13 trustee distributes your payments to creditors. You must also maintain insurance, make ongoing mortgage payments (outside the plan), and comply with all court requirements.

• 7

  Receive your discharge

  After completing all plan payments and the required debtor education course, the court issues your discharge. Remaining dischargeable unsecured debts are eliminated. Chapter 13 discharges are slightly broader than Chapter 7 discharges in some areas.

Florida's Most Powerful Protection

The Florida Homestead Exemption in Bankruptcy — Unlimited, But With Rules

Florida's homestead exemption is protected by the Florida Constitution, Article X, Section 4 — making it one of the strongest property protections in the United States. In bankruptcy, a qualifying Florida homestead is protected from creditors regardless of its value. A home worth $2 million and a home worth $200,000 receive the same protection. But the exemption has specific requirements that, if not met, can dramatically reduce the protection available.

The Requirements

What You Must Show to Claim the Unlimited Homestead Exemption

Requirement 1: Primary Residence in Florida

The property must be your primary residence — where you actually live. Vacation homes, rental properties, and investment properties do not qualify for the homestead exemption, regardless of how much you paid for them or how long you have owned them. You must be a Florida resident.

Requirement 2: Acreage Limits — Size Matters

The Florida Constitution limits the size of the protected homestead:

• In a municipality (city, town, or village): The homestead may not exceed one-half acre (0.5 acres)
• Outside a municipality (unincorporated area, rural land): The homestead may not exceed 160 contiguous acres
• A home on a 200-acre farm outside city limits can protect 160 acres as the homestead, but the remaining 40 acres would not be protected by the homestead exemption
• In cities, most residential lots easily fall within the half-acre limit, making this requirement rarely an issue for urban and suburban homeowners

Requirement 3: The 1,215-Day Rule (The Most Important Timing Rule)

To claim the unlimited Florida homestead exemption in bankruptcy, you must have owned the property for at least 1,215 days (approximately 3 years and 4 months) before the bankruptcy filing date. This is a federal requirement added by Congress to prevent people from moving to Florida, buying an expensive home, and then immediately filing bankruptcy to shield it from creditors.

Requirement 4: The 40-Month Rule (for Chapter 7 Specifically)

To use the full amount of the Florida homestead exemption in Chapter 7 bankruptcy, federal law (11 U.S.C. §522(b)(3)(A)) requires that you have been domiciled in Florida for the 730 days (2 years) immediately before filing. If you have not been in Florida for 2 years, you must use the exemptions of the state where you were domiciled for the longer portion of the 180 days before the 730-day period. Additionally, the 1,215-day rule specifically governs the homestead exemption cap.

All Florida Bankruptcy Exemptions

Florida's Full Bankruptcy Exemption System (2026)

As of January 1, 2026, Florida's homestead and personal property exemption amounts remain the same. Florida exemptions change only when new legislation is enacted. Here is the complete picture of what Florida law protects in bankruptcy.

Tenancy by the Entirety — Protection for Married Couples

In Florida, property owned jointly by a married couple as "tenants by the entirety" is protected from debts owed by only one spouse. If a credit card debt, personal loan, or judgment is in one spouse's name only, it generally cannot be collected from property owned jointly by both spouses as tenants by the entirety. This protection is separate from and in addition to the homestead exemption, and it applies to both real estate and personal property.

Florida Bankruptcy Courts

Where to File Bankruptcy in Florida — The Three Federal Districts

Bankruptcy is exclusively a matter of federal law (U.S. Constitution, Art. I, §8). You file in a U.S. Bankruptcy Court — not with the Florida circuit court clerk, not with the county, not with any state agency. Florida has three federal bankruptcy districts covering all 67 counties. You must file in the district where you have lived for the greater part of the past 180 days.

County-to-District Lookup

Which Court Serves Your Florida County?

Use this reference to find your bankruptcy district based on your county. Always verify with the court website before filing, as divisions can change.

Filing Practical Tips

What to Know Before You File

• 1

  File in your district — filing in the wrong district causes delays

  Your county determines your district. The court will not transfer your case automatically — it may be dismissed if filed in the wrong district. Confirm your county's district at the court websites above.

• 2

  Payment methods vary by district — confirm before you show up

  The Middle District of Florida requires payment by money order or cashier's check at the courthouse. Cash, personal checks, and most credit/debit cards are not accepted in person at some locations. Confirm accepted payment methods with your specific court location before filing.

• 3

  Local rules differ by district — read them before filing

  The Northern District requires you to file a creditor matrix separately. The Middle District recently implemented stricter requirements for repeat filers (cases filed after a prior dismissal within 12 months). Each district has local rules beyond the federal rules — read them at the court's website before filing.

• 4

  Pro se self-help resources at each courthouse

  All three Florida districts offer pro se self-help information at their courthouses and websites. Staff cannot give legal advice but can tell you what forms to file and explain procedural steps. Many courts also maintain a list of pro bono bankruptcy attorneys and nonprofit legal aid organizations.

• 5

  The Bankruptcy Noticing Center sends official mail

  After filing, the court mails all official bankruptcy notices through the Bankruptcy Noticing Center (BNC). Keep your address updated with the court throughout your case. Missing a notice — such as a trustee's objection or a motion to dismiss — can result in your case being dismissed without your knowledge.