- Some bankruptcy rules are specific to Florida debtors.debt defined image by Christopher Walker from Fotolia.com
Individual debtors filing for bankruptcy must do so according to the federal bankruptcy laws. The bankruptcy code covers most aspects of the bankruptcy process. Debtors must defer to state laws on a few issues. Any Florida debtor planning on filing for personal bankruptcy must consult statutes from his state and abide by his state's exemption laws.
- Individual debtors may file for either Chapter 7 or Chapter 13 bankruptcy. To file for Chapter 7 bankruptcy, the debtor must pass a means test. The debtor compares his family income to the median family income for a family of the same size in Florida. If the debtor's family income is below the state median, the debtor can file for Chapter 7 bankruptcy.
As of 2010, the Census Bureau listed Florida's median incomes as $41,079 for a single earner; $52,073 for a family of two; $58,366 for a family of three; and $68,763 for a family of four. Add $7,500 for each family member in excess of four.
If the debtor's family income is above the state median, the debtor must calculate his monthly disposable income by deducting allowed monthly expenses from monthly income. If the debtor's monthly disposable income is less than $100, he can file for Chapter 7 bankruptcy. If the debtor's monthly disposable income is more than $100, but would not pay at least 25 percent of the debts over the next 60 months, the debtor can file for Chapter 7 bankruptcy.
- If the debtor's monthly disposable income is more than $100, and would pay 25 percent of the debts over the next 60 months, the debtor cannot file for Chapter 7 bankruptcy. She has essentially proven that she can fund a Chapter 13 repayment plan. If the debtor decides to file for Chapter 13 bankruptcy, she must propose a debt repayment plan to be approved by the bankruptcy court. If the debtor's family income is below the state median, the plan will last three years. If the debtor's family income is above the state median, the plan will last five years.
- In both Chapter 7 and Chapter 13 cases, the debtor must file a bankruptcy petition, along with schedules listing assets, liabilities, income, expenses, executory contracts, unexpired leases and a statement of financial affairs .A trustee will be appointed to each case. In a Chapter 13 case, the debtor will make monthly repayment plan payments to the trustee. The trustee will distribute payment to each of the debtor's creditors. In a Chapter 7 case, the trustee will sell the debtor's non-exempt property and use the proceeds to pay the debtor's creditors. The debtor can keep all exempt property.
Florida debtors can keep the following property: homestead to an unlimited value, not to exceed one-half acre in municipality, 160 acres elsewhere; motor vehicle up to $1,000; health aids; federal income tax credits or refunds; prepaid hurricane and medical savings accounts; prepaid college trusts; pre-funeral contract deposits; $1,000 of personal property; wages; pensions; public benefits; insurance; alimony and child support. Consult your state laws for a complete list.