Preparation is the key for success when filing bankruptcy in Florida. The best bankruptcy cases go unnoticed as debtors glide through the system without attracting attention to receive a full discharges in record time. Luck is not involved. Planning began months before filing.
The most successful filers know something that you don’t. Small lifestyle changes may alter means test income and expenses before filing. Well-planned strategic changes will have a dramatic effect on the results of the means test. With a few weeks or months to plan, creating $300 improvement on the bankruptcy means test calculation will save $18,000 in wasted Chapter 13 payments. Just as easily, many people avoid Chapter 13 altogether and may file Chapter 7 when understanding the test procedure. Timing is critical.
2010 Bankruptcy Strategies and the Means Test Explained
Chapter 12 applies to the adjustment of debts of a family farmer with regular income. Originally enacted in 1986, this form of reorganization of debts is similar to Florida bankruptcy under Ch. 13, however subject to higher allowances for included debt, special plan provisions, and the unique definition of family farmer provided for in 11 U.S.C. 101(18). To be an individual family farmer, the code requires the individual or individual and spouse engaged in a farming operation whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose aggregate noncontingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse unless such debt arises out of a farming operation), on the date Florida bankruptcy is filed, arise out of a farming operation owned or operated by such individual or such individual and spouse, and such individual or such individual and spouse receive from such farming operation more than 50 percent of such individual's or such individual and spouse's gross income for the taxable year preceding the taxable year in which the Florida bankruptcy concerning such individual or such individual and spouse was filed.
Because of the seasonal nature of farming, Congress deemed monthly payments required by other chapters unsuitable for farmers. If qualified, a family farmer filing a Florida bankruptcy under Ch. 12 must generate at least 50% of their income from farm operations and be capable of making regular payments. If past income is unstable, plan confirmation may be denied.
According to 11 U.S.C. 1226, payments and funds received by the trustee shall be retained by the trustee until confirmation or denial of confirmation of a plan. If a plan is confirmed, the trustee shall distribute any such payment. In practice, the requirement of payments to a trustee while in Florida bankruptcy under Ch. 12 includes payment of trustee fees which are deducted from amounts paid to creditors. Following the completion of the plan remaining debts are discharged similarly to the restrictions placed on Ch. 13 discharges.
Note: the particular chapter which may best serve debtors depends on many factors. Past due payments are treated differently. Property may be subject to forfeiture. The period of court supervision of the estate lasts from a few months, up to five years. The personal goals of each individual and their lawyer must receive primary consideration to maximize results.
Florida Bankruptcy topics.
