Gary H. Baker, P.A.
Attorney and Counselor at Law
News & Information
In October of 2005 a new bankruptcy law took effect. This “new law” made some major changes to the way in which bankruptcies are filed. It also imposed major changes to the forms and qualifications for filing different chapters of bankruptcy. One of the major changes is a new means testing to determine if a debtor is eligible to file a chapter 7 bankruptcy (“liquidation”) or if a debtor must file a chapter 13 bankruptcy ("wage-earner" or “reorganization”)
Bankrutpcies are filed in Federal Bankruptcy Court. In Florida there are three United States Bankruptcy Court districts (Northern, Middle and Southern). Each county in Florida is designated to file in a specific district, and a debtor must file in the district in which they live. We file cases in the .
It is important to understand how your residency can effect your bankruptcy case. The importance of this will become even more clear as you read through the information below. Under the 2005 bankruptcy rules, the State exemptions that you are entitled to are determined by the State in which you have lived for the 2 years (730 days) prior to filing your bankruptcy.
Therefore, the first step in the process of filing your bankruptcy is to determine which State exemptions you are entitled to. If you have been a resident of Florida for the past 730 days (2 years) then you will be filing with the Florida Exemptions. If you have not been a resident of Florida for the prior 2 years, the rule is more complicated. Your bankruptcy exemptions will be those of the state in which you lived for 180 days prior to the 2 years immediately preceding the bankruptcy filing. For people who have lived in more than one state over the previous few years you can see how complicated this can become.
If you have questions on your residency and what exemptions will apply, we highly recommend that you consult with a qualified bankruptcy attorney for guidance.
To schedule your free consultation to discuss your bankruptcy filing, exemptions, and more with an experienced bankruptcy lawyer, call (727) 793-0066 or e-mail us now.
As of the 2005 bankruptcy reform all debtors filing for bankruptcy must complete a means testing evaluation. This means testing determines whether a debtor can file a chapter 7 bankruptcy or whether they will have to enter into a chapter 13 reorganization. One important note, there are instances where a debtor who qualifies to file a chapter 7 bankruptcy through means testing may choose to file a chapter 13 bankruptcy.
Median testing can be very complicated, and there are exceptions and special circumstances that may vary. However, in general a debtor can only file a chapter 7 Bankruptcy if their median income is less than the median income for their state. The median income for each state is published and modified frequently to keep up with current data. The median income also is adjusted for the number of people living in the household. So, a family of 4 is allowed a higher median income than a family of 2 or a single individual.
Median income numbers were just updated in May of 2012.
As you read through this bankruptcy overview, you will see that one of the most important issues to you should be what is exempt property (property that you can keep) and what is non-exempt property (property the trustee can take and sell for the benefit of your creditors). Once again, the exemptions you are allowed will vary depending on your residency. However, for a debtor filing under Florida exemptions, here is a brief listing of some exempt property:
山东福彩官方下载appstead: Under the new bankruptcy law the 山东福彩官方下载appstead exemption for Florida debtors changed. Florida residents who file for bankruptcy and wish to claim a 山东福彩官方下载appstead exemption now fall into two categories. For those debtors who purchased and have lived in their 山东福彩官方下载appstead for more than 40 months there is an unlimited 山东福彩官方下载appstead exemption. This means any amount of equity can be protected. For those debtors who purchased their 山东福彩官方下载app less than 40 months ago, the new law exempts $146,450 (this amount is updated every 3 years) of equity in their 山东福彩官方下载appstead.
Car: In Florida you are allowed a $1,000 exemption of equity in a car. Most bankruptcy trustees use the NADA value in determining this exemption. Any additional equity in a car is not protected. Note: This is $1,000 of equity.
Personal Property: Each debtor is allowed a $1,000 exemption for all personal property. This includes clothing, furniture, tools, and cash. In other words, all of your “stuff”. When determing the value of personal property, most trustees use “garage sale value”.
Retirement & 401(k): Florida Statutes provide for an exemption for a variety of retirement accounts including 401(k), pensions, IRAs and annuities.
Education Accounts: Florida Statutes provide for an exemption for college savings plans including 529 plans.
Additional Florida Exemptions: Florida Statutes offer exemptions for a number of additional items including health savings accounts and annuities. If you have property that you think may be exempt you should consult a qualified attorney for more specific advice and information.
If you have property that is not-exempt it will be sold by the trustee and the proceeds will be distributed among your creditors. Note: If you have non-exempt property that you wish to keep, you may be able to enter into a buy-back agreement with the trustee.
If you are considering bankruptcy we encourage you to consult with a qualified bankruptcy lawyer. An important part of every bankruptcy filing is determining which of your assets are exempt and which assets are non-exempt. A qualified bankruptcy attorney can help you through this process.
To schedule your free appointment call (727) 793-0066 or e-mail us now.
Secured Debts - those debts where a creditor has a security interest in your property to guarantee payment. The most common examples of this are a mortgage or a car loan.
Reaffirmation? Bankruptcy law requires you to execute a reaffirmation agreement for any secured property that you wish to keep. For example, if you want to keep your car, and you are able to continue making the car payments, you reaffirm that debt. On the other hand, you may decide to surrender your property and not reaffirm a secured debt.
Unsecured Debts – those debts that are not secured by property. The most common example is credit cards, but this can also include items such as personal loans and medical bills.
There are a number of debts that are not dischargeable in bankruptcy. These include federal income tax, student loans, child support or alimony obligations, luxury goods, and any debt incurred through fraud. This is not an exhaustive list, and special circumstances and timing can effect whether or not debts are dischargeable. If you have questions about whether or not a debt may be dischargeable you should consult with a qualified bankruptcy attorney.