Business Bankruptcy
Who can file for bankruptcy?
Any individual, corporation, partnership, city, state or other institution may file for bankruptcy.
What is the point of bankruptcy?
Filing for bankruptcy can be viewed as a safety valve for people who have encountered financial difficulties (ranging from falling behind on mortage/credit card payments, etc.). It allows for them to reorganize their assets financially in hopes of fixing and fixing their debt.
What are the types of bankruptcy proceedings?
Chapter 7 is the most common form of bankruptcy available to individuals, married couples, corporations, and partnerships. In this proceeding, the debtors non-exempt assets are sold by the trustee and proceeds are then distributed to creditors.
Chapter 11 is generally for corporations or partnerships, but individuals meeting certain conditions may also file. Here, the debtor proposes a reorganization plan (may involve merger, sales of assets, repayment out of future profits, etc.) which creditors must accept and the court will then bind the parties to the terms of repayment.
Chapter 12 is for family farmers in which the debtor may retain his property and may creditors out of future income.
Chapter 13 is for individuals with a regular income, unsecured debt less than $336,900 and secured debt less than $1,010,650. The debtor is allowed to keep his property and make regular payments to the trustee out of future income over 3 to 5 years.
Will I have to give up all my assets?
No, the debtor may keep certain assets by exempting property from the bankruptcy estate.
What is usually included in a bankruptcy estate? How is it determined?
As bankruptcy law includes both federal and state law, federal government has the power to pass bankruptcy laws; however, states have been able to create its own set of exemptions. Depending on the state, some states have their own set of exemptions to replace the federal list, while others have the choice between state or federal law exemptions. In addition, if state exemptions are used in any state, you may also claim certain exemptions set by federal law.
What types of assets may be included in exemptions?
Assets that are taken into account include: homestead, insurance, pensions personal property, public benefits, tools of your trade, wildcard, as well as other miscellaneous assets that can range from child support payments to property owned by business partnerships.
Does being single or married affect bankruptcy exemption?
Depending on the circumstances, the amount of exemptions can be doubled if a married couple files a join bankruptcy.
What is a wildcard exemption?
A wildcard is an exemption that allows the debtor to keep assets that would not usually be exempt as long as the value does not exceed the states limits. The wildcard exemption only applies to Chapter 7 bankruptcy.
What are residency requirements for bankruptcy exemption?
To discourage people from moving to states with more liberal exemptions before filing for bankruptcy, they must have lived in a state for 2 years before being allowed to use the states exemptions. For that do not allow you to use exemptions unless you currently live in that state, federal exemptions will be used.
What is a homestead exemption?
Homestead exemptions protect the values of homes and prevent the forced sale of a home to meet the demands of creditors.
California
Does California follow state or federal law in regards to bankruptcy exemptions?
California offers the choice between two sets of exemptions that both come under California state law. Federal bankruptcy exemptions are not available.
What are the differences between the two sets of state of exemptions?
System 1 is similar to other state exemptions in that is allows a large homestead exemption and is usually preferred by people who own homes. System 2 is more similar to federal exemptions since it allows the person to use homestead exemption for other property.
The specifics of the two systems can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/california-bankruptcy-exemptions.htm and http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/california-bankruptcy-exemptions-2.htm
What is the degree of protection from forced sale under homestead exemption law?
CA allows protection up to $75,000 for single individuals, $100,000 for married couples and $175,000 for people over 65 or legally disabled.
District of Columbia
Does this state get to use either federal or state exemptions?
DC offers the choice of either using federal or state exemptions, but not both at the same time.
How is marital property treated?
Courts have held that if only one spouse owes the debt, the property owned by a married couple as a tenancy by the entirety is exempt.
Where can the DC statutes be found?
The bankruptcy exemptions statutes can be found in the District of Columbia Code.
The breakdown of exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/dc-bankruptcy-exemptions.htm
Texas
Does this state get to use either federal or state exemptions?
TX offers the choice of either using federal or state exemptions, but not both at the same time.
What is the degree of protection from forced sale under homestead exemption law?
Texas has a very broad homestead protection. There is no dollar value limit. Instead there is a 10 acre exemption limit for urban homestead. 100 acres is allowed for a rural homestead, which is doubled to 200 acres for a family.
Where can the TX statutes be found?
Two sets of statutes can be found in the Texas Codes as well as the Texas Revised Civil Statutes.
The breakdown of exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/texas-bankruptcy-exemptions.htm
Florida
Are federal bankruptcy exemptions available?
No, FL only offers state exemptions.
How is property held by a married couple treated?
If only one spouse owes a debt, property that is held under tenancy by the entirety can be exempt. However, if both spouses owe a debt, regular homestead exemptions apply.
Where can the FL statutes be found?
Exemption statutes can be found in the Florida Satutes Annotated.
The breakdown of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/florida-banruptcy-exemptions.htm
Illinois
Are federal bankruptcy exemptions available?
No, IL only offers state exemptions.
Where can the IL statutes be found?
Statutes can be found in the Illinois Compiled Statutes.
Specifics of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/illinois-bankruptcy-exemption.htm
Maryland
Are federal bankruptcy exemptions available?
No, only state exemptions are offered.
Does MD have a homestead exemption?
No, there is no statutory homestead exemptions; however, if only one spouse is a debtor, then the residence owned by the married couple as a tenancy by the entirety is exempt.
Where can I find the MD statutes?
The states statutes can be found in Maryland Code of Courts and Judicial Proceedings.
Specifics of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/maryland-bankruptcy-exemptions.htm
New York
Are federal bankruptcy exemptions available?
No, NY only offers its own state exemptions.
Can I choose which assets will be included in the bankruptcy?
No, all assets and debts must be listed in the bankruptcy; to hide or transfer them is against the law.
Where can I find NY bankruptcy exemption statutes?
Statutes can be found in New York Civil Practice Law and Rules.
Specifics of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/new-york-bankruptcy-exemptions.htm
Virginia
Are federal bankruptcy exemptions available?
No, VA only offers its own state exemptions.
If only one spouse is the debtor, is there a homestead exemption?
Though not included in VAs statutory homestead exemption, courts have held that exemptions can apply to a mobile home. Also, if only once of the spouses owes the debt, any real property owned by a married couple as a tenancy by entirely may be exempt as well.
Where can I Find the VA statutes?
Statutes can be found in the Code of Virginia.
Details of the exemptions may be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/virginia-bankruptcy-exemptions.htm
Any individual, corporation, partnership, city, state or other institution may file for bankruptcy.
What is the point of bankruptcy?
Filing for bankruptcy can be viewed as a safety valve for people who have encountered financial difficulties (ranging from falling behind on mortage/credit card payments, etc.). It allows for them to reorganize their assets financially in hopes of fixing and fixing their debt.
What are the types of bankruptcy proceedings?
Chapter 7 is the most common form of bankruptcy available to individuals, married couples, corporations, and partnerships. In this proceeding, the debtors non-exempt assets are sold by the trustee and proceeds are then distributed to creditors.
Chapter 11 is generally for corporations or partnerships, but individuals meeting certain conditions may also file. Here, the debtor proposes a reorganization plan (may involve merger, sales of assets, repayment out of future profits, etc.) which creditors must accept and the court will then bind the parties to the terms of repayment.
Chapter 12 is for family farmers in which the debtor may retain his property and may creditors out of future income.
Chapter 13 is for individuals with a regular income, unsecured debt less than $336,900 and secured debt less than $1,010,650. The debtor is allowed to keep his property and make regular payments to the trustee out of future income over 3 to 5 years.
Will I have to give up all my assets?
No, the debtor may keep certain assets by exempting property from the bankruptcy estate.
What is usually included in a bankruptcy estate? How is it determined?
As bankruptcy law includes both federal and state law, federal government has the power to pass bankruptcy laws; however, states have been able to create its own set of exemptions. Depending on the state, some states have their own set of exemptions to replace the federal list, while others have the choice between state or federal law exemptions. In addition, if state exemptions are used in any state, you may also claim certain exemptions set by federal law.
What types of assets may be included in exemptions?
Assets that are taken into account include: homestead, insurance, pensions personal property, public benefits, tools of your trade, wildcard, as well as other miscellaneous assets that can range from child support payments to property owned by business partnerships.
Does being single or married affect bankruptcy exemption?
Depending on the circumstances, the amount of exemptions can be doubled if a married couple files a join bankruptcy.
What is a wildcard exemption?
A wildcard is an exemption that allows the debtor to keep assets that would not usually be exempt as long as the value does not exceed the states limits. The wildcard exemption only applies to Chapter 7 bankruptcy.
What are residency requirements for bankruptcy exemption?
To discourage people from moving to states with more liberal exemptions before filing for bankruptcy, they must have lived in a state for 2 years before being allowed to use the states exemptions. For that do not allow you to use exemptions unless you currently live in that state, federal exemptions will be used.
What is a homestead exemption?
Homestead exemptions protect the values of homes and prevent the forced sale of a home to meet the demands of creditors.
California
Does California follow state or federal law in regards to bankruptcy exemptions?
California offers the choice between two sets of exemptions that both come under California state law. Federal bankruptcy exemptions are not available.
What are the differences between the two sets of state of exemptions?
System 1 is similar to other state exemptions in that is allows a large homestead exemption and is usually preferred by people who own homes. System 2 is more similar to federal exemptions since it allows the person to use homestead exemption for other property.
The specifics of the two systems can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/california-bankruptcy-exemptions.htm and http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/california-bankruptcy-exemptions-2.htm
What is the degree of protection from forced sale under homestead exemption law?
CA allows protection up to $75,000 for single individuals, $100,000 for married couples and $175,000 for people over 65 or legally disabled.
District of Columbia
Does this state get to use either federal or state exemptions?
DC offers the choice of either using federal or state exemptions, but not both at the same time.
How is marital property treated?
Courts have held that if only one spouse owes the debt, the property owned by a married couple as a tenancy by the entirety is exempt.
Where can the DC statutes be found?
The bankruptcy exemptions statutes can be found in the District of Columbia Code.
The breakdown of exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/dc-bankruptcy-exemptions.htm
Texas
Does this state get to use either federal or state exemptions?
TX offers the choice of either using federal or state exemptions, but not both at the same time.
What is the degree of protection from forced sale under homestead exemption law?
Texas has a very broad homestead protection. There is no dollar value limit. Instead there is a 10 acre exemption limit for urban homestead. 100 acres is allowed for a rural homestead, which is doubled to 200 acres for a family.
Where can the TX statutes be found?
Two sets of statutes can be found in the Texas Codes as well as the Texas Revised Civil Statutes.
The breakdown of exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/texas-bankruptcy-exemptions.htm
Florida
Are federal bankruptcy exemptions available?
No, FL only offers state exemptions.
How is property held by a married couple treated?
If only one spouse owes a debt, property that is held under tenancy by the entirety can be exempt. However, if both spouses owe a debt, regular homestead exemptions apply.
Where can the FL statutes be found?
Exemption statutes can be found in the Florida Satutes Annotated.
The breakdown of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/florida-banruptcy-exemptions.htm
Illinois
Are federal bankruptcy exemptions available?
No, IL only offers state exemptions.
Where can the IL statutes be found?
Statutes can be found in the Illinois Compiled Statutes.
Specifics of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/illinois-bankruptcy-exemption.htm
Maryland
Are federal bankruptcy exemptions available?
No, only state exemptions are offered.
Does MD have a homestead exemption?
No, there is no statutory homestead exemptions; however, if only one spouse is a debtor, then the residence owned by the married couple as a tenancy by the entirety is exempt.
Where can I find the MD statutes?
The states statutes can be found in Maryland Code of Courts and Judicial Proceedings.
Specifics of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/maryland-bankruptcy-exemptions.htm
New York
Are federal bankruptcy exemptions available?
No, NY only offers its own state exemptions.
Can I choose which assets will be included in the bankruptcy?
No, all assets and debts must be listed in the bankruptcy; to hide or transfer them is against the law.
Where can I find NY bankruptcy exemption statutes?
Statutes can be found in New York Civil Practice Law and Rules.
Specifics of the exemptions can be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/new-york-bankruptcy-exemptions.htm
Virginia
Are federal bankruptcy exemptions available?
No, VA only offers its own state exemptions.
If only one spouse is the debtor, is there a homestead exemption?
Though not included in VAs statutory homestead exemption, courts have held that exemptions can apply to a mobile home. Also, if only once of the spouses owes the debt, any real property owned by a married couple as a tenancy by entirely may be exempt as well.
Where can I Find the VA statutes?
Statutes can be found in the Code of Virginia.
Details of the exemptions may be found here: http://bankruptcy-law.freeadvice.com/bankruptcy-law/bankruptcy-law/virginia-bankruptcy-exemptions.htm
