Bankruptcy in Florida, Part 5
Continued from Bankruptcy in Florida, Part 4
If you've read from the beginning, you understand that the Constitutionally embedded notion of bankruptcy exists for honest citizens and businesses to be able to start over and to remain as viable, functioning citizens within the community and economy. We've covered such basics as the power of the federal bankruptcy code, as well as where and how to engage your U.S. Bankruptcy Court within the three divisional courts in Florida.
To wrap things up, we need to address:
- state versus federal exemptions
- the 341 meeting, and
- debt that can not be discharged.
Although bankruptcy is administered via federal, civil law, provisions are made to allow states to opt out of the federal exemptions. In 15 states and Washington D.C., debtors can choose between the exemptions or the their home state's exemptions--but there's no mixing and matching; it's either one or the other. Unfortunately, Florida does not allow the federal exemptions; fortunately, however, Florida is generally considered as one of the more generous states for debtor exemptions, especially homestead exemptions.
Unlike the federal exemptions, the various state exemptions are not gathered in one official listing but scattered throughout the states' statutes. One version of the Florida exemptions is listed here, but the U.S. Courts advise that "The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives."
Meeting of the creditors
Once your petition is completed, including any exemptions and your plan for liquidation (or reasons why no assets are available for liquidation or your reorganization plan, you basically wait for the court to send you notice of your "341 meeting," which typically occurs about a month after your initial filing. Notice: filings can be amended but even if you have an attorney, each amended filing adds to the total cost--so you want to be as complete as possible, meeting all deadlines and listing all creditors.
The 341 meeting is the opportunity for creditors to attend and ask you questions. The trustee can--and will--ask questions. By law, the trustee must ascertain certain basic information and may ask just about anything in order to ensure your filing is legitimate and the responses accurate. In most individual cases, however, creditors do not bother to attend. On the other hand, you will probably be spoken to, as a group, by a district judge and then listen to debt counseling program. Expect the whole affair, including a lunch break, to last a bit less than a regular business day.
Some debt can not be discharged
Some of the myths that have spread about bankruptcy is that a successful discharge "wipes out" all debt. The most obvious debts that bankruptcy can not address are IRS taxes, child support and student loans. However, some tax debt can be included in a repayment plan, and student loans can be dismissed in rare cases of extreme hardship.
According to the U.S. Courts, "The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees."
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