• Chapter 7 bankruptcy is often the last resort for consumers seeking to eliminate unsecured debt.money, money, money image by easaab from Fotolia.com
  
  Florida Chapter 7 bankruptcy laws are among the most liberal in the United States, regarding the amount of assets consumers are allowed to keep. These consumer friendly laws are only available to residents of the state or business owners who own property and operations within its borders. Anyone considering bankruptcy should consult with a bankruptcy attorney before making the final decision to file.
  
  

The Means Test

• Before a bankruptcy hearing may take place, the court must first conduct a means test on your income to determine whether or not your debt can actually be paid down in your current situation. As long as your income falls below the median income for families of similar sizes in the state of Florida, you will be ruled eligible for Chapter 7 bankruptcy. If you are denied Chapter 7 eligibility, you still have the option to file for Chapter 13 bankruptcy.
  
  

Filing For Bankruptcy

• Once the means test has been approved, the court bankruptcy filing may take place. The petition for bankruptcy is presented with a statement of financial affairs that details your income, assets and existing debts along with creditor information. The bankruptcy petition is the single most important document in the process because it is the compass that will guide the court in making the final decision on whether to grant you bankruptcy or not.
  
  

Liquidation of Assets

• If the court grants you bankruptcy, your assets will be turned over to a bankruptcy trustee. The trustee is responsible for liquidating your assets into one lump sum of money and then distributing that sum evenly among your creditors. The court forgives any debt that remains after the liquidation of your assets and no creditor may pursue you for that amount of money.
  
  

Exempt Property

• Florida is one of the more liberal states when it comes to allowing exemptions during the bankruptcy process. A bankruptcy trustee cannot liquidate exempt assets to pay debts. Homesteads up to 160 acres that are valued up to $137,000, equity in an automobile up to $1,000 and personal property valued at up to $1,000 are all exempt assets during the bankruptcy process.
  
  

341 Hearing

• After the bankruptcy hearing has taken place the bankruptcy trustee will conduct a first meeting of the creditors, known as a "341 hearing." The trustee will ask you questions under oath regarding the truthful reporting of your assets. Your only obligation at the hearing is to answer all of the questions truthfully. After the hearing, creditors have 60 days to try to convince the court that you should not be allowed to vacate your debts.