Chapter 7 Bankruptcy in Florida: How It Actually Works

A step-by-step explanation from a Florida consumer bankruptcy attorney. Written in plain English — with the law cited underneath, so you can check every word.

Most people picture bankruptcy as someone showing up to take your things. That is not what Chapter 7 is. In the large majority of the Chapter 7 cases we file, nothing is sold, nobody comes to your house, and the client keeps every single thing they own.

Here is what Chapter 7 actually is: a legal process that erases debt you cannot pay, in about three to four months, in exchange for full honesty about your finances.

The rest of this page walks through exactly how it works, who qualifies, what gets erased and what doesn’t, how long each piece takes, and — the part we think is most valuable — the mistakes we see people make before they call a lawyer. Some of those mistakes are very hard to undo. If you read only one section, read the one about things to be careful about.

Quick answers at a glance

Question	Short answer
What is Chapter 7?	A court process that erases most debt in 3–4 months.
Will the trustee sell my stuff?	Usually nothing. Most consumer cases are “no-asset” cases.
How do I qualify?	Income below the Florida median, or you pass the means test.
Florida median income (1 person)	$69,876 for cases filed on or after 15 July 2026.
Does Social Security count against me?	No. It is excluded from the income calculation.
What gets erased?	Credit cards, medical bills, payday loans, judgments, deficiencies.
What survives?	Support, recent taxes, most student loans, fraud debts, DUI injury debts.
How long?	About 3–4 months from filing to discharge.
Biggest trap?	Paying back family, or moving assets, in the months before filing.
Do I have to pay the lawyer first?	Not with us. Qualifying clients file with zero down.
End result	A permanent federal court order. Those debts are gone for good.

Jump to a section

1. How does Chapter 7 actually work?
2. How does a person qualify?
3. How long does each step take?
4. What debts get erased — and what doesn’t?
5. What to be careful about before you file — read this one
6. What is the end result?
7. How attorney’s fees work — and why we can offer zero down

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Part 1: How does Chapter 7 actually work?

Short answer: You disclose everything. A trustee checks whether you own anything the law does not protect. Almost always the answer is no. Then the court erases your debts.

Chapter 7 is sometimes called “liquidation” bankruptcy, which is an unfortunate name because it scares people about something that rarely happens. Here is the real machinery, in order:

1. You file a petition listing everything you own, everyone you owe, all your income, and all your monthly spending. Complete honesty is the price of admission — more on that below.

2. A trustee is appointed. The trustee is not a judge and not your enemy. The trustee is an administrator with one main job: find property that is not protected, sell it, and pay creditors with the proceeds.

3. The trustee looks at your property against Florida’s exemption list. An exemption is a rule that says “creditors cannot touch this.”

4. In most cases, the trustee finds nothing to sell. These are called no-asset cases, and they are the norm in consumer Chapter 7, not the exception.

5. The court enters a discharge order. Your debts are legally erased.

Why do so many cases end with nothing being sold? Because Florida’s exemptions were written to cover what ordinary people actually own:

What you own	Florida protection
Your home	Unlimited value (up to ½ acre in a city, 160 acres outside)
One car	$5,000 of equity
Household goods, clothing, electronics	$1,000 — plus $4,000 more if you don’t claim the homestead
401(k), IRA, pension, Roth	Fully protected
Social Security, VA, unemployment, workers’ comp	Fully protected
Wages, if you are head of family	100% up to $750/week
Life insurance cash value and annuities	Fully protected
Disability income	Fully protected
Prepaid college and medical savings accounts	Fully protected
Earned Income Tax Credit refund	Protected

Add those up and you have described most people’s entire net worth. That is the whole reason “they’ll take everything” is a myth.

The law behind this: 11 U.S.C. § 704(a)(1) (trustee’s duty to collect and reduce to money property of the estate); 11 U.S.C. § 541 (property of the estate); 11 U.S.C. § 522 and Fla. Stat. § 222.20 (Florida opted out of the federal exemption list); Fla. Const. art. X, § 4 (homestead; $1,000 personal property); Fla. Stat. § 222.25(1) ($5,000 motor vehicle, raised from $1,000 by SB 158, ch. 2024-110, Laws of Fla., effective July 1, 2024); Fla. Stat. § 222.25(3) (earned income credit), § 222.25(4) ($4,000 wildcard); Fla. Stat. § 222.11 (head of family wages); Fla. Stat. § 222.21 (retirement accounts); Fla. Stat. § 222.14 (life insurance cash value and annuities); Fla. Stat. § 222.18 (disability income); Fla. Stat. § 222.22 (prepaid college and medical savings); Fla. Stat. § 222.201 (Social Security and other public benefits).

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Part 2: How does a person qualify for Chapter 7?

Short answer: There are three requirements. The one people worry about — the means test — is passed automatically by most filers, and even those who fail step one often still qualify.

Requirement 1: Take a credit counseling course before you file

A short course, usually online, from a government-approved agency. It takes about an hour and costs roughly $10–$50 (waived or reduced if you cannot afford it). It must be completed within 180 days before filing. Doing it after you file does not count — this is a genuine trap for do-it-yourself filers.

Requirement 2: Enough time must have passed since any prior bankruptcy

• If you received a Chapter 7 discharge before, you must wait 8 years from the filing date of that case to the filing date of the new one.
• If you received a Chapter 13 discharge before, the wait is generally 6 years, with exceptions if you paid your unsecured creditors in full or paid 70% in a good-faith best-effort plan.

Requirement 3: Pass the means test

This is a two-step test, and most people never get past step one.

Step one: Is your income at or below the Florida median for your household size?

If yes, you are done. You qualify. No further math.

Florida median family income — for cases filed on or after July 15, 2026:

Household size	Florida median income
1	$69,876
2	$86,523
3	$97,540
4	$114,761
Each additional person	add $11,100

Two critical details about how income is measured:

It is a six-month backward look, not your current paycheck. The law uses your average monthly income over the six full calendar months before the month you file, then multiplies by 12. So if you file in September, the window is March 1 through August 31.

Social Security is excluded entirely. This is enormous and widely unknown. Many Florida retirees who look like they “make too much” pass easily once Social Security is pulled out of the calculation.

Step two: If you are above the median, you are not disqualified — you just do more math.

You complete a second form that subtracts a long list of allowed expenses from your income: IRS national standards for food and clothing, IRS local standards for housing and transportation (which vary by Florida county), your actual mortgage and car payments, taxes, health insurance, childcare, court-ordered support, and more.

What’s left is your monthly disposable income. Then:

• If it comes to less than $10,275 over 60 months (about $171/month), there is no presumption of abuse — you qualify.
• Between $10,275 and $17,150, it depends on whether that amount would pay 25% of your unsecured debt.
• Above $17,150 over 60 months, abuse is presumed — but even then, you can rebut it by showing special circumstances, such as a serious medical condition or a call to active military duty.

In our experience, most above-median Florida filers still pass. A Florida mortgage, a car payment, and health insurance consume a lot of income on paper.

Some people skip the means test entirely:

• Filers whose debts are not primarily consumer debts (mostly business debt).
• Disabled veterans whose debts were largely incurred while on active duty or performing homeland defense activity.
• Reservists and National Guard members called to active duty, for a period during and after that service.

One honest caveat. Passing the arithmetic is not the whole story. A judge can still dismiss a case filed in bad faith or where the overall circumstances show abuse — for example, someone with genuinely comfortable income who simply prefers not to pay. This is rare, and it is not aimed at people who fell behind because of job loss, illness, or divorce. But it is why the story behind your numbers matters, and why a lawyer who can present that story matters.

The law behind this: 11 U.S.C. § 109(h) (pre-filing credit counseling; 180-day window); 11 U.S.C. § 727(a)(8) (8-year bar after a prior Chapter 7 discharge); 11 U.S.C. § 727(a)(9) (6-year bar after a prior Chapter 13, with the full-payment and 70% exceptions); 11 U.S.C. § 707(b)(7) (safe harbor for below-median filers); 11 U.S.C. § 101(10A) (definition of current monthly income; six-month lookback); 11 U.S.C. § 101(10A)(B) (Social Security benefits excluded); 11 U.S.C. § 707(b)(2)(A)(i) (presumption of abuse thresholds of $10,275 and $17,150, as adjusted April 1, 2025); 11 U.S.C. § 707(b)(2)(A)(ii) (IRS National and Local Standards); 11 U.S.C. § 707(b)(2)(B) (special circumstances); 11 U.S.C. § 707(b)(2)(D) (disabled veteran and reservist exclusions); 11 U.S.C. § 707(b)(1), (b)(3) (non-consumer debts; bad faith and totality of the circumstances); U.S. Trustee Program, Census Bureau Median Family Income by Family Size (cases filed on or after July 15, 2026); Official Forms 122A-1 and 122A-2.

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Part 3: How long does each step take?

Short answer: About three to four months from filing to discharge. But the relief you actually feel — the phone calls stopping, the garnishment stopping — happens on day one.

Before filing: usually 2 to 6 weeks

This stage moves at whatever speed you can gather documents. What we need:

• Six months of pay stubs
• Two years of tax returns
• Bank statements
• Photo ID and Social Security card
• A list of everyone you owe

Then you take the credit counseling course, we prepare the petition, and you review and sign it.

One practical note about fees. Most bankruptcy firms require the entire attorney’s fee to be paid before the case is filed, and there is a real reason for it — not greed. We use a different structure that lets qualifying clients file with nothing down. How that works, and why most firms don’t offer it →

If you are facing an imminent garnishment, repossession, or foreclosure sale, this stage can be compressed to a day or two. Tell us the deadline.

Day 0: Filing

• Case number issued. The automatic stay begins immediately. Collection, garnishments, lawsuits, and foreclosure sales all stop by force of federal law.
• A trustee is assigned.
• Creditors receive notice from the court within about a week.

Days 1–14

We send the trustee your most recent tax return — due at least 7 days before your meeting — plus whatever else that trustee requests.

Days 21–40: The meeting of creditors

Held by Zoom. Runs 5 to 10 minutes. The trustee, not a judge, asks whether you read your paperwork and whether it is complete and true. Creditors are invited and almost never appear. Your attorney is on the call with you.

Days 41–100: The quiet stretch

Several deadlines run in the background. You have one job; your attorney watches the rest.

Deadline	What it is
Within 60 days after the meeting	Your job: complete the financial management course (online, about an hour)
60 days after the meeting	Last day for anyone to object to your discharge or claim a debt is nondischargeable
30 days after the meeting concludes	Last day for the trustee or a creditor to object to your exemptions
60 days after the meeting	Reaffirmation agreements due, if you are keeping a financed car

Day 90–120: Discharge

The court enters your discharge order. Your debts are legally gone. In a no-asset case, the file closes shortly after.

If yours is an asset case — meaning the trustee is selling something or pursuing a claim — the case may stay open longer, sometimes considerably. Your discharge still arrives on the normal schedule. The case simply stays open while the trustee finishes administering.

The law behind this: 11 U.S.C. § 362(a) (automatic stay, effective on filing); 11 U.S.C. § 521(a) (debtor’s duties); 11 U.S.C. § 521(e)(2) (tax return to trustee 7 days before the meeting); 11 U.S.C. § 341 (meeting of creditors; no judge may preside); Fed. R. Bankr. P. 2003(a) (meeting held 21–40 days after the order for relief); 11 U.S.C. § 727(a)(11) and Fed. R. Bankr. P. 1007(c) (financial management course); Fed. R. Bankr. P. 4004(a) (60-day deadline to object to discharge); Fed. R. Bankr. P. 4007(c) (60-day deadline for dischargeability complaints); Fed. R. Bankr. P. 4003(b) (30-day deadline to object to exemptions); Taylor v. Freeland & Kronz, 503 U.S. 638 (1992) (an unchallenged exemption stands even if legally improper); 11 U.S.C. § 521(a)(6) and Fed. R. Bankr. P. 4008(a) (reaffirmation timing); Fed. R. Bankr. P. 4004(c) (entry of discharge).

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Part 4: What debts get erased — and what doesn’t?

Short answer: Chapter 7 erases most ordinary consumer debt. It does not erase support obligations, recent taxes, most student loans, or debts from fraud or drunk driving.

Debts Chapter 7 usually erases

• Credit cards and store cards
• Medical and hospital bills
• Personal loans and signature loans
• Payday loans
• Deficiency balances — what you still “owe” after a car is repossessed or a home is foreclosed
• Most money judgments from lawsuits
• Old utility bills
• Broken lease and unpaid rent balances
• Collection accounts
• Business debts you personally guaranteed
• Older income taxes, if they meet the timing rules below
• Gym memberships, and pre-filing timeshare and HOA assessments

Debts that survive

Debt	Why it survives
Child support and alimony	Protected by statute. Never dischargeable.
Divorce property settlements	Not dischargeable in Chapter 7 — but they can be in Chapter 13.
Recent income taxes	Generally survive; older ones may not. See below.
Most student loans	Survive unless you win an undue hardship case.
Debts from fraud or a false financial statement	Survive if a creditor sues and proves it.
Fiduciary fraud, embezzlement, larceny	Survive.
Willful and malicious injury to person or property	Survive.
Death or injury from drunk driving	Survive. Always.
Criminal fines and restitution	Survive.
Debts you failed to list	May survive. Disclose everything.
HOA and condo dues coming due after you file	Survive as long as you still hold title.
401(k) loans	Survive.

About taxes, because this one surprises people in a good way. Income taxes can be discharged if all of these are true: the return was due more than 3 years ago, the return was actually filed more than 2 years ago, the tax was assessed more than 240 days ago, and there was no fraud or willful evasion. Many people carrying old IRS debt qualify and have no idea. Payroll taxes and trust-fund taxes never qualify.

About divorce, because this one surprises people in a bad way. Your obligation to pay your ex $20,000 for their share of the house equity is not dischargeable in Chapter 7 — but it is dischargeable in Chapter 13. If you have a divorce-related debt, that fact alone can determine which chapter is right for you. It is one of the clearest examples of why “which chapter” is a legal question, not a paperwork question.

The single most important concept on this page: liens survive

Discharge erases your personal obligation to pay. It does not erase a lien on property.

Picture two ropes. One ties the debt to you. One ties it to the house or the car. Bankruptcy cuts the rope tied to you. The rope tied to the property stays.

That is why:

• If you want to keep the house, you keep paying the mortgage.
• If you want to keep the financed car, you keep paying the car loan.
• If you give the collateral back, the remaining balance is erased.

One powerful exception. A judicial lien — a lien a creditor got by suing you and winning — can often be stripped off exempt property entirely through a motion in your case. If a creditor recorded a judgment against you, ask about this specifically. It is frequently missed.

A warning for people with business partners or joint ventures. In 2023 the Supreme Court held that a debt obtained by someone else’s fraud can be nondischargeable against an innocent partner. If you were in business with someone whose conduct you are unsure about, tell your attorney early.

The law behind this: 11 U.S.C. § 727(b) (scope of discharge); 11 U.S.C. § 523(a)(1) with § 507(a)(8) (tax discharge and the 3-year, 2-year, and 240-day rules); § 523(a)(2) (fraud and false financial statements); § 523(a)(3) (unlisted debts); § 523(a)(4) (fiduciary fraud, embezzlement, larceny); § 523(a)(5) (domestic support obligations); § 523(a)(6) (willful and malicious injury); § 523(a)(7) and (a)(13) (fines and criminal restitution); § 523(a)(8) (student loans); § 523(a)(9) (death or injury from intoxicated driving); § 523(a)(15) (divorce property settlements — nondischargeable in Chapter 7, dischargeable in Chapter 13 under § 1328(a)); § 523(a)(16) (post-petition HOA and condominium assessments); § 523(a)(18) (retirement plan loans); § 523(a)(19) (securities law violations); 11 U.S.C. § 522(c)(2) (liens survive discharge); 11 U.S.C. § 522(f) (avoiding judicial liens impairing exemptions); 11 U.S.C. § 524(a)(1)–(2) (the discharge injunction); Bartenwerfer v. Buckley, 598 U.S. 69 (2023) (fraud of a partner or agent imputed under § 523(a)(2)(A)).

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Part 5: What to be careful about before you file

This is the most valuable section on this page. Everything above is a description of a process. This is where cases actually go wrong — and almost all of it happens in the months before anyone calls a lawyer.

Please read this before you do anything with your money or your property.

Money you move

1. Do not pay back family or friends. This is the single most common well-intentioned disaster we see. If you repay your mother $8,000 before filing, the trustee can sue her to get it back and distribute it to your other creditors. The lookback is 90 days for ordinary creditors and a full year for insiders — family members, business partners, close associates. Your mother did nothing wrong and can still be sued. Call before you pay anyone back.

2. Do not pay one creditor a lot while ignoring others. Same rule. Large payments in the 90 days before filing can be clawed back.

3. Do not run up balances, take cash advances, or do balance transfers. Charging more than $900 in luxury goods within 90 days of filing, or taking more than $1,250 in cash advances within 70 days, creates a legal presumption that the debt was fraudulent — meaning that specific debt may not be erased.

4. Do not touch retirement money. Your 401(k) and IRA are fully protected sitting where they are. The moment you withdraw, that protection is gone and you owe taxes and usually a 10% penalty. We have watched people destroy twenty years of savings to buy a few months of breathing room, then file anyway.

Property you move

5. Do not sell, gift, or transfer anything — especially to relatives. Taking your name off a deed or car title to “protect” it is one of the most damaging things you can do. The trustee can unwind transfers made for less than fair value going back 2 years under federal law, and 4 years using Florida’s fraudulent transfer statute. Worse: a transfer made within 1 year with intent to hinder creditors can cost you your entire discharge. Not one debt — all of them.

6. Do not sell property cheap to a friend “to keep it in the family.” Same statutes. Fair value, documented, or don’t do it.

Timing

7. Your tax refund is an asset. A refund you have not yet received belongs to the bankruptcy estate. In Florida, only the Earned Income Tax Credit portion is specifically protected; the rest has to come out of your $4,000 wildcard, if you have it available. Filing in January with a $6,000 refund on the way can mean handing that refund to the trustee. Filing a few weeks later, after you have received and reasonably spent it on living expenses, can mean keeping it. This alone is worth a phone call.

8. Income timing cuts both ways. Because the means test looks back six months, a bonus, commission spike, severance payment, or heavy overtime inside that window can push you above the median. Sometimes waiting one or two months changes the answer completely. And if you just lost your job, waiting makes qualifying easier, not harder.

9. An inheritance within 180 days after filing belongs to the estate. Not 180 days before — after. If an elderly relative is seriously ill, that is a fact your attorney needs to know before choosing a filing date.

10. Do not wait until the foreclosure sale. A case filed before the sale takes place stops the sale — the automatic stay is effective the moment the petition is filed, which means a filing tomorrow morning can stop a sale tomorrow afternoon. Once the sale actually happens, the options narrow dramatically.

Disclosure

11. Disclose everything. Everything. The lawsuit nobody knows about. The side gig. The crypto. The LLC that never made money. The car titled in your name that your brother drives. The savings account you forgot. The pending personal injury claim.

Concealment is what actually costs people their discharge — far more often than owning too much property. Making a false oath can wipe out your entire case and is a federal crime. Meanwhile, disclosing an asset usually leads to a conversation about how to protect it. Trustees have access to more than people expect: tax returns, real property records, DMV records, and public databases.

In 17 years, we have never had a client harmed by telling us too much. We have seen people harmed by telling us too little.

12. A pending lawsuit or injury claim is an asset. Florida has no separate personal injury exemption beyond the wildcard. If you have a case pending, say so — sometimes the right answer is to wait, or to file Chapter 13 instead.

Other people’s exposure

13. Your co-signer gets no protection. Your discharge protects you. If your mother co-signed your car, the creditor can go straight at her after you file. Chapter 13 sometimes offers a co-debtor stay that Chapter 7 does not. If someone co-signed for you, that changes the analysis.

14. Move your bank account if you owe that same bank. If you have a credit card with the bank that holds your checking account, they may have a right to seize the balance to offset the debt. Open an account elsewhere before filing.

Everything else

15. Keep paying for what you want to keep. Don’t stop the mortgage or car payment on the theory that bankruptcy handles it.

16. Recent move to Florida? If you have lived here less than 730 days, you may be required to use your former state’s exemptions — which may be far less generous than Florida’s. This can be the difference between keeping and losing your home.

17. Bought your home within the last 40 months? The equity you gained during that window is capped at $214,000 rather than Florida’s unlimited protection.

18. Be careful who you hire. Non-lawyer “petition preparers” and debt-relief companies are tightly restricted by federal law and cannot give you legal advice. Nearly every case we see fall apart was a do-it-yourself or preparer-assisted filing that went wrong on one of the items above.

The law behind this: 11 U.S.C. § 547(b) (preference recovery; 90 days generally, 1 year for insiders under § 101(31)); 11 U.S.C. § 547(c)(8) ($600 floor in primarily consumer debt cases); 11 U.S.C. § 548 (fraudulent transfers, 2-year reachback); 11 U.S.C. § 544(b) with Fla. Stat. §§ 726.105, 726.110 (4-year Florida reachback); 11 U.S.C. § 727(a)(2) (transfer with intent to hinder within 1 year — grounds to deny discharge entirely); 11 U.S.C. § 727(a)(3)–(a)(6) (inadequate records, false oath, unexplained loss of assets, refusal to obey orders); 18 U.S.C. § 152 (bankruptcy fraud); 11 U.S.C. § 523(a)(2)(C) ($900 luxury goods within 90 days; $1,250 cash advances within 70 days, as adjusted April 1, 2025); 11 U.S.C. § 541(a)(1), (a)(5) (property of the estate, including inheritances within 180 days after filing); Fla. Stat. § 222.25(3) (earned income credit refund); 11 U.S.C. § 553 (setoff rights of your own bank); 11 U.S.C. § 522(b)(3)(A) (730-day domicile rule); 11 U.S.C. § 522(p) ($214,000 cap on equity acquired within 1,215 days); 11 U.S.C. § 1301 (Chapter 13 co-debtor stay, unavailable in Chapter 7); 11 U.S.C. § 110 (limits on bankruptcy petition preparers).

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Part 6: What is the end result?

Short answer: A permanent federal court order that erases those debts forever. Not for five years. Not until you get back on your feet. Permanently.

The discharge order is a federal injunction. From the day it is entered, it is illegal for any of those creditors to try to collect from you again — no calls, no letters, no lawsuits, no garnishments. Not in five years. Not in thirty. A creditor who violates it is in contempt of federal court, and you can recover damages and attorney’s fees. We handle those cases too, and they come up more often than you’d think.

Here is what your life actually looks like on the other side:

The debt is gone. Not reduced. Not renegotiated. Gone.

You keep what the law protects — which, in Florida, is most of what an ordinary person owns.

Your paycheck is your paycheck again. No garnishment. No surprise levy on your account.

Your credit begins recovering, usually faster than you expect. The filing can be reported for up to 10 years, but scores commonly start climbing within 12 to 24 months, because zero balances and no past-due accounts are what scoring models actually reward. Many clients are approved for a car loan within a year or two, and a mortgage within two to four years.

You get one of these roughly every eight years. That is worth saying plainly: the discharge is a genuinely valuable thing, not a resource to be spent casually. That is another reason timing and planning matter.

And the part nobody puts in a statute: you sleep. The calls stop. You stop doing math at 2 a.m. that never works out. Clients tell us this more than anything else — more than the money, it was the quiet.

If you have been treating this as a personal failure, consider that Congress built this system on purpose, and the Supreme Court described its aim nearly a century ago as giving the honest but unfortunate debtor a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.

That is a promise written into American law. It exists for people exactly like you.

The law behind this: 11 U.S.C. § 727 (Chapter 7 discharge); 11 U.S.C. § 524(a)(2) (discharge operates as a permanent injunction against collection); 11 U.S.C. § 105(a) (contempt authority to enforce the discharge injunction); Taggart v. Lorenzen, 587 U.S. 554 (2019) (standard for civil contempt sanctions against a creditor who violates a discharge); 15 U.S.C. § 1681c(a)(1) (10-year credit reporting period); 11 U.S.C. § 727(a)(8) (8-year interval between Chapter 7 discharges); Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934) (the purpose of the fresh start).

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How attorney’s fees work in Chapter 7 — and why we can offer zero down

Short answer: there are two legitimate ways to structure the fee. The traditional way requires you to pay in full before filing. The bifurcated way lets you file with nothing down. We offer both, and we will show you the comparison so you can pick.

This section exists because money is the number one reason people who need to file don’t. If that’s you, this is the part that matters.

Why almost every firm asks for the money up front

It comes down to one quirk in the law.

A Chapter 7 discharge erases the debts you owe as of the day you file — and your unpaid attorney’s fee is one of those debts. If your lawyer files your case while you still owe them $1,500, that $1,500 is discharged right along with your credit cards. The lawyer cannot legally collect it.

So the traditional model isn’t a firm being difficult. It’s the only way to get paid under a single agreement signed before filing. The result, though, is a genuine access problem: the people who most need Chapter 7 are the people least able to produce a lump sum, and the traditional model asks them for exactly that.

The bifurcated model — how nothing down actually works

Bifurcated just means split in two. Instead of one agreement covering the whole case, there are two:

Agreement one, before filing. Covers the work required to get your case on file — the emergency stop that halts the garnishment, the repossession, or the foreclosure sale. Under this arrangement, qualifying clients pay nothing toward attorney’s fees for this stage.

Agreement two, after filing. Once your case is filed, we sign a second agreement covering the remaining work — the schedules, the trustee’s document requests, preparing you for and attending the meeting of creditors, reaffirmations, and everything else through discharge.

Here is the mechanism that makes it work: because that second agreement is signed after the case is filed, the fee under it is a post-petition debt. It was not in existence on the filing date, so the discharge does not touch it — which means it can be paid over time, in installments, after your case is already protecting you.

What that means in practice: the automatic stay goes into effect, the calls and the garnishment stop, and then you pay, in monthly amounts, out of the paycheck you just got back.

The honest parts

We would rather you hear these from us.

You will pay court and course fees regardless. The $338 filing fee goes to the court, not to us, and we are not permitted to advance it for you — Florida’s bankruptcy courts have held that a firm paying the filing fee and seeking reimbursement afterward violates both the Bankruptcy Code and the Florida Bar rules. What the court does allow: paying it in up to four installments, and waiving it entirely if your household income is at or below 150% of the federal poverty guidelines. The credit counseling course is $10–$50 and most agencies reduce or waive it if you can’t pay.

The post-petition fee is not larger to punish you for not paying up front. The amount has to be reasonable for the work actually done after filing, and the court can review it and order money returned if it isn’t. That’s a real check, not a promise from us.

You see both agreements at the same time, before you sign anything. Not the first one now and the second one as a surprise later. Both, together, so you know the full cost of your case at the outset.

You get 14 days to cancel the second agreement. After you sign the post-petition agreement, you have a two-week window to rescind it. That is not our policy being generous — it is a requirement the bankruptcy courts imposed on arrangements like this, and it exists specifically so nobody can be pressured into signing at a vulnerable moment.

You have three choices after your case is filed, and we will tell you all three. You may continue with us under the second agreement. You may hire a different lawyer. You may proceed on your own. And our representation of you continues until the court authorizes us to withdraw — signing up for zero down does not mean you get dropped if you don’t sign the second agreement.

Every dollar we charge is disclosed to the court. Federal law requires your attorney to file a statement of compensation in your case. What you pay us is not private between us; it’s on the record, reviewable by the court and by the U.S. Trustee.

No outside lender is involved. We carry these fees ourselves. Nobody buys your account, no lender’s interest rate is built into what you pay, and the amount is not inflated to cover a third party’s cut.

To be complete about it: in the 2022 case described just below, we did offer one client the option of borrowing from an independent lender to cover the post-petition fee. The court approved that arrangement. It simply never proved useful in practice, and we have not used one since. Where a firm does use outside financing, the bankruptcy court reviews that arrangement as well and requires the firm to disclose its relationship with the lender — a sensible rule, and one more reason we keep this simple.

Is this legitimate?

Yes — and unusually for a question like this, we can point you to the actual decisions.

In this district, Judge Michael Williamson of the U.S. Bankruptcy Court for the Middle District of Florida reviewed a two-contract Chapter 7 fee structure in 2012 and held it permissible, while setting out the conditions it has to meet — separate, conspicuous disclosures; the client’s acknowledgment of receiving them; the 14-day right to cancel; and continued representation until the court permits withdrawal.

In the Southern District, Chief Judge Laurel Isicoff reached the same conclusion in 2021 in a detailed opinion, holding that a bifurcated arrangement meeting the court’s standards violates neither the Bankruptcy Code, nor the bankruptcy rules, nor the local rules, nor the Rules Regulating The Florida Bar.

And in 2022, a judge of this court’s Tampa Division reviewed our own fee agreement. The U.S. Trustee asked the court to cancel it. The court held that bifurcated agreements are permissible here — they exist because a client facing garnishment genuinely cannot produce a lump sum — but told us specific things had to be clearer: which services fell on which side of the filing date, and a conspicuous statement that the post-petition fee is not wiped out by the discharge. We rewrote the agreement to the court’s specifications, and the court approved it.

We would rather you know that than not. Almost everything on this page is specific because a federal judge told us to make it specific. A firm advertising zero down that can’t tell you which judge reviewed its paperwork hasn’t been through this.

And the Department of Justice’s U.S. Trustee Program — the government office that polices attorney fees in bankruptcy — has published enforcement guidelines permitting these arrangements where the fees are reasonable, the disclosures are clear, and the particulars are on the public record.

None of these are blanket approvals, and we want to be straight about that: they approve arrangements that meet the conditions, and they void the ones that don’t. Courts in other states have gone the other way entirely — the Western District of Kentucky barred bifurcated agreements outright in 2021.

Which is the actual reason the disclosures above read the way they do. They aren’t marketing copy. They are the standard, and we built our agreements to meet it.

The law behind this: In re Shatusky, 2022 Bankr. LEXIS 1451 (Bankr. M.D. Fla., Tampa Div., 2022) (bifurcated Chapter 7 fee agreements permissible in this district as a necessary accommodation for debtors who cannot pay a lump-sum pre-petition fee; approval denied without prejudice on the agreement as then drafted for failure to delineate pre- from post-petition services, failure to disclose conspicuously that the post-petition obligation is not discharged, and failure to file the supplemental disclosure required by Fed. R. Bankr. P. 2016(b); merely presenting an independent third party’s financing option, as distinct from advising a client to incur debt, does not violate 11 U.S.C. § 526(a)(4); where financing is part of the bifurcation arrangement the court will review it and requires disclosure of the firm–lender relationship before the pre-petition agreement is signed, of any processing fee the firm pays the lender, and of any financial or managerial involvement between firm members and the lender; approval granted on the revised agreement); Walton v. Clark & Washington, P.C., 469 B.R. 383 (Bankr. M.D. Fla. 2012) (Williamson, J.) (approving a two-contract Chapter 7 fee structure subject to enumerated disclosure conditions, including a separate disclosure cover page, client acknowledgment, a 14-day right to cancel the post-petition agreement, continued representation until court-authorized withdrawal, and explanation of the debtor’s three post-filing options; the court had earlier barred the firm’s use of post-dated checks for post-petition fees as violating the automatic stay and discharge injunction); In re Brown, 631 B.R. 77 (Bankr. S.D. Fla. 2021) (Isicoff, C.B.J.) (bifurcated fee arrangements meeting the court’s conditions violate neither the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, nor the Rules Regulating The Florida Bar; conditions include separate disclosure forms, simultaneous presentation of both agreements, itemization of excluded services, a 14-day rescission period, a prohibition on factoring fee agreements, and reasonableness of the post-petition fee); In re Digregorio, 645 B.R. 262 (Bankr. S.D. Fla. 2022); 11 U.S.C. § 329 and Fed. R. Bankr. P. 2016(b) (mandatory disclosure of compensation; court may cancel any agreement exceeding the reasonable value of services); 11 U.S.C. § 526 and R. Regulating Fla. Bar 4-1.8(e) (attorney may not advance or finance the court filing fee and seek post-petition reimbursement); 11 U.S.C. § 528 (required clear and conspicuous fee disclosures); R. Regulating Fla. Bar 4-1.2 (limitations on the scope of representation must be disclosed); R. Regulating Fla. Bar 4-1.1, Fed. R. Bankr. P. 9011(b), and 11 U.S.C. § 707(b)(4) (competence and reasonable-inquiry standards against which the fee is measured); U.S. Trustee Program, Enforcement Guidelines for Bifurcated Fee Agreements. Contrast In re Balwin (Bankr. W.D. Ky. 2021) (barring bifurcated fee agreements in that district).

Which one is right for you?

If you can comfortably pay the fee up front, the traditional route is simple and usually costs less overall. If you can’t — and if a garnishment or a sale date is bearing down on you — the zero-down option is the difference between filing now and filing after the damage is done.

We will tell you honestly which one fits your situation. That conversation is free.

CALL A LAWYER

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Is Chapter 7 right for you?

Not always. Chapter 13 is the better tool if you are behind on a mortgage and want to keep the house, need to catch up on a car, owe a divorce property settlement, have recent tax debt, want to protect a co-signer, or have more equity than the exemptions cover.

That choice is the most important decision in your case, and it gets made before anything is filed. It is also the decision that is nearly impossible to make well from a website — including this one.

Talk to us

The consultation is free, and there is no obligation. Come with your questions, your paperwork, or nothing at all. We will tell you honestly whether Chapter 7 is right for you — and if it isn’t, we will tell you that too.

If any of the warnings in Part 5 describe something you have already done, please come in anyway. Most of it can be worked around if we know about it early. Almost none of it can be fixed after filing.

Debt Relief Legal Group — (813) 231-2088 — aborden@1800debtrelief.com — 14502 N Dale Mabry Hwy Ste 200, Office 304-5, Tampa, FL 33618

Serving consumer bankruptcy clients throughout Florida.

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About this article

Written by Alan Dexter Borden, a Florida consumer bankruptcy attorney with 17 years of experience in Chapter 7 and Chapter 13 cases, student loan discharge, adversary proceedings, and consumer protection litigation under the Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act.

Last reviewed: 29 July 2026

This article is general information about Florida and federal bankruptcy law, not legal advice about your situation. Every case is different, and the details matter enormously.

Two sets of figures on this page change on their own schedules. Federal Bankruptcy Code dollar amounts adjust every three years; the amounts here apply to cases filed between April 1, 2025 and March 31, 2028. Florida median income figures are updated by the U.S. Trustee Program roughly twice a year; the amounts here apply to cases filed on or after July 15, 2026. Always verify current figures before relying on them.

Reading this article does not create an attorney-client relationship. Please speak with a licensed bankruptcy attorney before making any decision — especially before moving money or property.