Bankruptcy Law

Bankruptcy Law is primarily federal law and administered by the federal courts. However, the state consumer and commercial laws do play important roles in certain bankruptcy issues and some circumstances.

Filing bankruptcy grants relief to individuals and businesses in financial trouble, and protects their creditors to the extent possible. Generally, the bankruptcy process assesses the debtor's assets and liabilities and provides a structure within which a debtor may be allowed to keep some of their property. Remaining debts are typically discharged, except certain types, such as debt obtained by fraud, education loans, domestic support orders, and most types of tax debt.

Bankruptcy is an available option for individual consumers and businesses. There are two major bankruptcy types: Liquidation and Reorganization. Since 2005, Bankruptcy Law has become more complicated. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is a major reform of the bankruptcy system.

The following are some of the key changes, as a result of the passage of this law, that debtors should be aware of are:

• Before filing for bankruptcy, most debtors must now undergo credit counseling in a government-approved program.
• Debtors who wish to file under Chapter 7 (Liquidation) must meet certain eligibility requirements under a "means test."
• Debtors wishing to file bankruptcy under Chapter 7 (Liquidation) or Chapter 13 (Reorganization) must show proof of their income by providing federal tax returns from the last tax year.
• If a debtor is ineligible for filing under Chapter 7 (Liquidation) based on the "means test," he or she must file under Chapter 13 (Reorganization) instead.
• Some protections have been eliminated. For example, filing for bankruptcy no longer delays or stops eviction actions, driver's license suspensions, legal actions for child support, or divorce proceedings.
• Changes were made to creditor priority, in that persons who are owed unpaid child support and alimony take priority over any other creditor.
• Also, after the conclusion of the bankruptcy proceeding, but before any debt can be discharged, debtors must participate in a government-approved financial management education program.

If you need an experienced, focused, and qualified attorney, contact Attorney Gina Silvestri at the law office of Allen & Arcadier, P.A.

Our Melbourne office is centrally located, enabling us to serve clients throughout "the Space Coast", including Brevard County and Vero Beach.