Bankruptcy is always a stressful and difficult experience to endure. If you are considering filing for bankruptcy it is important to make sure that you understand how bankruptcy laws apply in the state in which you live. While many of the laws regarding bankruptcy are fairly straightforward, there are some differences in bankruptcy laws among the states. If you live in Florida, you should make sure you understand Florida business bankruptcy laws. An experienced Florida business bankruptcy lawyer can help you understand those laws and how they apply to your situation.

One of the differences between Florida business bankruptcy laws and the other states relates to income guidelines. New laws in 2005 changed the regulations regarding who is eligible to file for Chapter 7 bankruptcy. Applicants for Chapter 7 in Florida must meet both income and means tests as established by Florida business bankruptcy laws. In addition, Florida business bankruptcy laws also regulate which assets are considered to be exempt and nonexempt.

All eligible assets under Chapter 7 will be turned over to the court in order to be liquidated by the appointed trustee. Funds from the liquidation will be used to pay the business’ debts. Eligible items may include additional vehicles beyond the individual’s primary vehicle, boats, motorcycles, jet skins and any other items that are considered to be luxuries and non-essential for earning a living.

Under Florida business bankruptcy law, individuals who file for bankruptcy may not necessarily lose their home. With that said, it should be understood that filing for Chapter 7 does not wipe out the individual’s responsibility to pay for secured debts, including mortgages and auto loans. In the event that the person fails to pay their mortgage payments on time then the lender could still foreclose on the property.

Chapter 7 is a good solution for business owners who have accumulated more unsecured debt than they are able to pay. Once the foreclosure case has been properly discharged and the business owner is relieved of having to make unsecured debt payments they will often be able to afford to continue making their vehicle and mortgage payments, provided they have income.

Some business owners may not qualify for Chapter 7 under Florida business bankruptcy laws because they either do not meet the state’s income qualification guidelines or because they fail the state’s means tests. Chapter 7 was designed for businesses that are not able to make continuing payments toward repaying their unsecured debts. When a business does not qualify for Chapter 7 they may opt instead for another form of bankruptcy such as Chapter 11, which allows a business to restructure and continue day to day operations.

When filing for bankruptcy in Florida, it is important to keep in mind that you can only claim exemptions on assets if you have lived in Florida for a minimum of two years. If you have lived in the state for less than two years, then exemptions from whatever state you previously lived in would apply.

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1. California Business Bankruptcy

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