May 192011
 
Understanding and Planning For Involuntary Bankruptcy

Many of the creditor protections that Florida residents appreciate are significantly reduced or eliminated in the event of bankruptcy. This is because the powers of the bankruptcy trustee are very broad and the superiority of federal bankruptcy law over state law is well-established in our country. For example, generally under Florida law a debtor enjoys an unlimited exemption from creditors for their IRA, whereas in bankruptcy this amount is limited to approximately $1.7 million. Similarly, subject to certain restrictions a Florida residents enjoy an unlimited homestead exemption from forced sale by creditors, whereas in bankruptcy, there can be a cap More…