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Bankruptcy Laws in Florida

State vs. Federal Bankruptcy Laws

The vast majority of the laws concerning bankruptcy are contained in the United States Bankruptcy Code, a body of federal laws that outline the various rights and procedures involved in a bankruptcy case. The names for the different types of bankruptcy, Chapter7, Chapter 11 and Chapter 13 all refer to the fact that they are chapters of Title 11 of the United States Code. Bankruptcy is handled in federal courts such as the United States Bankruptcy Court in Jacksonville, the nearest location to Gainesville. There are, however, certain sections of Florida state law that can influence the outcome of a bankruptcy case in Gainesville.

Florida Bankruptcy Exemptions Explained by a Gainesville Bankruptcy Lawyer

In many states, it is possible to choose between federal and state exemptions for use in protecting one's personal property and assets against the claims of the bankruptcy trustee in a Chapter 7 case. In Florida, however, state law only allows you to use the state exemptions. Fortunately, the exemptions in Florida are widely recognized as being generous to the bankruptcy petitioner. They include an unlimited homestead exemption under most circumstances, as well as provisions for equity in an automobile, personal income, pensions, college savings, insurance benefits, and child support and alimony. If, like nearly half of Florida homeowners, your mortgage is underwater, you can choose to waive the homestead exemption without fear of losing your house, since the bankruptcy trustee would be unable to raise any funds by liquidating that asset. By doing this, you can increase the personal property exemption by as much as 800 percent.

Another aspect of bankruptcy which will be affected by where you live is your ability to pass the means test for Chapter 7. In order to prove that you are eligible, you will be required to pass this test if your current monthly income is greater than the median income for the state. According to the U.S. Department of Justice, this figure currently ranges from $40,036 for an individual, to as much as $66,874 for a family of four and $6,900 more for each additional family member. There are, however, county-specific allowances which can be claimed in order to bring your income amount down to a level where it will pass the test such as a $422 housing allowance for a single person renting or $977 for a mortgage. At The Law Offices of Justin McMurray, P.A., we have more than a decade of experience helping individuals and families from across Florida, and we are ready to put our skill and knowledge of state and federal law to work for you. Contact us now for a free consultation!

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