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Last Updated: Wednesday, April 8, 2026

Chapter 7 (Individual or Business Liquidation)

A Chapter 7 discharges or wipes out many (most) debts and allows you to keep property which Florida has declared as exempt. The exemptions are generous, and couples and people with an average amount of assets will maintain much, if not everything, which is owned.

Bankruptcy through a Chapter 7 will stop garnishments, lawsuits, and harassment, both immediately and permanently. It will temporarily stop repossessions and foreclosures. A Chapter 7 filing will resolve credit card debt, medical bills, and old taxes.

A Chapter 7 is not a choice for you if you are behind on your mortgage and are trying to keep your home. In that case, you should consult us concerning a Chapter 13 filing.

There are income-based limits on who may file Chapter 7, as it is compared to your expenses (means test). The means test is complex and, therfore, it is important to speak with us so we can properly advise you of whether you qualify to file a Chapter 7. Do not rely on the Internet to figure it out yourself.

Answers to Common Bankruptcy Questions

What is a Chapter 7 bankruptcy?

A Chapter 7 will help you if:

• You are behind on your monthly bills or mortgage payment
• Your wages are being garnished, or your utilities are turned off
• You are being harassed by debt collectors, or you are being sued

Bankruptcy immediately stops all of your creditors from seeking to collect debts from you. Bankruptcy contemplates the "forgiveness" of debt. Under the U.S. Bankruptcy Code, a debtor may only obtain the discharge of debts in a Chapter 7 bankruptcy once every eight years. The Bankruptcy Code was created by our government to give debtors a fresh start in their financial life.

What can a bankruptcy do for a debtor?

• Prevent repossession of a car and in some cases require the return of your car after it has been repossessed
• Stop foreclosure on your house or mobile home and provide you with time to catch up with your payments. Bankruptcy will not remove or eliminate any mortgage on your property without full payment.
• Stop the garnishment of your wages or attachment of your property and harassment by debt collectors
• Eliminate most debt otherwise called the discharge of debt
• Restore or prevent the termination of your utility service
• Provide an opportunity to modify the amount of a lien on a car or other personal property using its fair market value

What Can Bankruptcy Not Do?

• It cannot force a secured creditor to accept less in payment on real estate
• Some debt is specifically listed in the Bankruptcy Code for special treatment and cannot be discharged. Student loans, (there are exceptions which would need to be discussed), child support, taxes ( there are exceptions which would need to be discussed), alimony, court restitution orders and criminal fines
• Provide a co-signer on your debt with a discharge of that debt. The co-signer will continue to be responsible for the debt

Sub‑Chapter 5 (Small Business Reorganization)

Answers for Business Owners Looking to Reorganize and Keep their Business
On February 19, 2020, the Small Business Reorganization Act (SBRA) went into effect. The SBRA provides an efficient, affordable, and effective pathway for businesses and business owners to reorganize their personal and business finances that were not otherwise available within a traditional expensive Chapter 11 case. Some of the many benefits of the SBRA that are not otherwise available under a traditional Chapter 11 case are listed below:

• Streamlined process where the court must hold a status conference within 60 days and a reorganization plan must be filed within 90 days. This is in comparison to roughly a year in a traditional file.
• Business owner can retain control of the company and receive a discharge of business debts if all disposable income of business is paid for three years. Business owner can still pay himself or herself a reasonable salary and benefits during this period.
• Allows modification of mortgage on owner's primary residence if the funds were used to fund the operations of a small business.
• Significantly lower administrative expenses in comparison to a traditional Chapter 11. There are no quarterly fees to the United States Trustee Program, a savings of approximately $20,000 over the course of a normal file, and the firm's legal fees are greatly reduced by the streamlined process.

Within the CARES act, Congress recognized that many businesses and their owners are going to need to reorganize so they expanded eligibility by increasing the debt limit from $2,725,625.00 to $7,500,000.00. The firm recognizes the extreme hardship that COVID-19 has caused our community and as a result we are offering free consultation and planning advice to any affected company or person. For businesses and persons, early planning has a tremendous effect on creating successful outcomes.

Chapter 11 (Traditional Reorganization)

A formal process for an individual or business to negotiate with creditors to restructure debt and payment responsibilities. The process requires a significant number of documents to be filed and supporting information including financial statements and leases must be provided. Schedules detailing assets, liability, income and expenses are required to be filed. This Chapter is intended for larger businesses.

Bankruptcy Trustee Representation

The Salkin Law Firm has over 30 years of extensive experience assisting trustees with their duties to investigate a debtor's financial condition, marshalling assets, reviewing claims and when appropriate, pursuing avoidance actions, turnover actions, preference and claim litigation.