Bankruptcy Information for Florida
If you find yourself struggling to repay your debts, bankruptcy can potentially be the best solution to your financial problems. Both consumer and corporate bankruptcy filings must adhere to the process established by the U.S. Bankruptcy Code. In addition to federal guidelines, each state may establish their own local rules for filing bankruptcy. In Florida, bankruptcy cases are heard in the Northern, Southern and Middle District bankruptcy courts.
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Types
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The two most common types of consumer bankruptcy filings in Florida are Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, your debts are eliminated and any nonexempt assets you may have are seized, liquidated and distributed to your creditors. In a Chapter 13 bankruptcy, you keep your assets and repay your debts over time. Chapter 11 applies to businesses while Chapter 12 applies to family farmers or fishermen. Municipalities may file under Chapter 9.
Means Testing
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To file bankruptcy in Florida, you must pass a means test, which measures your income against the median income for your family size. The means test serves two purposes. First, it determines your eligibility to file Chapter 7. As of 2010, a single debtor in Florida is allowed a maximum median income of $41,079, according to the U.S. Trustee Program. A family of four is allowed a maximum median income of $68,763.
If you're filing Chapter 13, the means test determines the length of your repayment period. If your income is higher than the median, your repayment plan will last five years. If it's less, you only have to pay for three years.
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Process
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Your bankruptcy petition must be filed in the district bankruptcy court nearest to where you live. You must be a state resident for two years prior to filing. At the time you file, you must have completed certified credit counseling in the previous 180 days. You must also pay the appropriate filing fees. As of 2010, the fees are $299 for Chapter 7, $274 for Chapter 13, $1039 for Chapter 9 or 11 and $239 for Chapter 12.
Exemptions
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In a Chapter 7 bankruptcy, you are allowed to exempt a certain amount of your assets from seizure. As of 2010, you or your spouse may exempt an unlimited amount of equity in your home. You may exempt the full value of prepaid hurricane savings accounts, health savings accounts or college savings accounts. Florida also allows you to exempt a motor vehicle up to $1,000, any personal property up to $1,000, health aids, your previous six months wages up to $500 per week, retirement accounts, alimony, child support and life insurance proceeds.
Considerations
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A Chapter 7 bankruptcy can remain on your credit for up to ten years. Chapter 13 can remain for up to seven years. If you file Chapter 13 in Florida, you cannot buy or sell any property or obtain new credit without the court's consent. A Chapter 7 or Chapter 13 filing cannot erase certain types of debt, including back taxes, alimony, child support, student loans or fraudulent debts.
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References
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