The following is basic information
about bankruptcy and the course of events you may experience
in a Florida bankruptcy case filed in the Middle District, Orlando
Division. If you cannot find the answer to your question in
the information below you should direct your individual question
to a bankruptcy attorney.
Introduction
The new bankruptcy law (effective
October 17, 2005) makes filing bankruptcy more complicated.
The new laws includes impediments to filing bankruptcy, new
bankruptcy court rules, new forms, and additional work for debtors
and their attorneys. Additionally, there are many parts
of the new law which are ambiguous and subject to multiple interpretations.
Because of this, there is some risk and uncertainty about how
the new law may impact your assets.
As judges interpret
and clarify this law through their court decisions, the new
bankruptcy law will become more clear. Since bankruptcy
courts are located all over the country, even after one judge
interprets a part of the new law, it will take time for the
judge's interpretation to be tested on appeal and for the ultimate
ruling to spread throughout the country's legal community.
Who
Can File Bankruptcy in Florida
A permanent resident
of Florida can file bankruptcy in a Florida bankruptcy court.
Florida has three bankruptcy districts (Southern District, Middle
District, and Northern District), and each of Florida’s
counties is assigned to one of the three bankruptcy districts.
You must file bankruptcy in the district of your residence.
I represent bankruptcy debtors only in the Middle District of
Florida which includes many counties along the I-4 corridor
(Daytona Beach to Tampa) and I-95 from Brevard County to Jacksonville.
An important concept in Chapter 7 and Chapter 13 bankruptcy
is “exemptions” or “exempt property.”
When you file a Chapter 7 bankruptcy, the Trustee takes all
of your “non-exempt” property and sells it for the
benefit of your unsecured creditors. The Trustee cannot take
your exempt property and you may keep all of your exempt property
regardless of its value and amount. What property is “exempt”
and what property is “non-exempt” depends on the
laws of the applicable state. Each state has its unique laws
about what assets are exempt and non-exempt for bankruptcy purposes.
Therefore, before you file bankruptcy you and your bankruptcy
attorney must ascertain which state laws will determine your
exempt assets.
Florida has liberal bankruptcy exemptions, including an unlimited
homestead exemption. Only Florida residents (who meet residency
requirements) are eligible for Florida exemptions. Just because
you are a Florida resident when you file for bankruptcy does
not mean you are entitled to Florida exemptions in bankruptcy.
Under the new bankruptcy law the state exemption law applicable
to your bankruptcy is determined by the state in which you have
been domiciled for the 730 days (two years) immediately preceding
your filing date. If you have not been a permanent resident
of Florida for the two-year period immediately preceding your
bankruptcy, then your bankruptcy exemptions will be those allowed
by the state in which you were domiciled for 180 days immediately
preceding the two-year period, or the state in which you were
domiciled for the longer portion of such 180-day period.
Otherwise stated, a person filing bankruptcy in Florida today
is eligible for the property exemptions he could have claimed
if he had filed bankruptcy two years ago. If this person was
a Florida resident two years ago, he claims Florida exemptions
today; if two years ago he was a resident of a different state
then he is entitled to the exemptions of the state of his prior
residence.
EXAMPLE
Joe
Smith sells his residence in Georgia for $100,000 and
moves to Florida in January. In March of that
year, he purchases a Florida homestead for $100,000,
gets a Florida drivers license, and registers to vote
in Florida. In March of the following year (14
months after becoming a Florida resident), Joe loses
his job and files bankruptcy. Under the new bankruptcy
law, Georgia's relatively limited exemption laws would
apply to this bankruptcy, and the debtor would not have
the benefit of Florida homestead protection.
|
In reality, the laws
about bankrutpcy exemptions are even more complicated than the
example above. Many issues are unclear under the new law
and will have to be resolved over time through court decisions.
Before you file bankruptcy in Florida, you and your attorney
should discuss where you have resided during the past few years
and should discuss whether Florida bankruptcy exemptions would
apply in your case.
