Don’t Let a Florida Lookback Period Mistake Derail Your Bankruptcy

If you are considering either a Chapter 7 (liquidation) bankruptcy or a Chapter 13 (restructuring) bankruptcy, you should be aware of the impact of lookback periods. Bankruptcies are federal actions but they are governed by both federal and state law. A bankruptcy lookback period in Florida is no different.

A lookback period is a range of time in which the bankruptcy court or trustee can look back over your finances and transactions in order to make decisions that will impact your bankruptcy. They vary in time according to the situation and factors involved.

If you performed a transaction that is against the rules during a bankruptcy lookback period, it could derail your bankruptcy petition.

What is the Lookback Period for Bankruptcy in Florida? 

The lookback period for most Florida bankruptcy cases is two years. This means that the trustee can scrutinize your financial transactions (for the two years leading up to bankruptcy), including but not limited to: 

• Income
• Expenses
• Asset transfers 

It’s important to note that the lookback period may be longer in certain circumstances. That’s especially true for cases involving fraudulent or improper transfers of assets, concealment of property, other prohibited activities, and bankruptcies involving federal government agencies. 

Continue reading to learn about the lookback period for Florida bankruptcy cases.

Purposes of Florida Bankruptcy Lookback Periods

There are basically three purposes for a lookback period.

Means Test

The means test is used to determine whether or not you are eligible to file for bankruptcy. Consumers filing for bankruptcy case must complete Form 22A-1 if they are filing a Chapter 7 or Form 22C-1 if they are filing for Chapter 13. Both are really a means test that measures your income and your expenses in order to calculate how much money you have available to repay creditors.

Expect the court to require information about wages and income including any commissions or bonuses you may have earned, large loans or gifts even if they are from your family, receipt of any trust assets or inheritance, dividend or interest income any distributions from your retirement fund and yes, even tax refunds.

The lookback period for a means test in Florida is six months.

Of course, this is the short version. Your Florida bankruptcy lawyer can explain exceptions and details relevant to your specific case.

Avoidable Preferences

The bankruptcy court also has a lookback period to consider avoidable preferences. You make an avoidable preference if before petitioning for bankruptcy you pay one creditor over another even though they are similar.

Now something to consider is that this payment may not even have been voluntary. Perhaps a creditor garnished your wages. If it’s within the lookback period, that may still be considered an avoidable preference.

The lookback period in Florida for an avoidable preference is usually 90 days. If the bankruptcy trustee thinks there has been an avoidable preference, they can sue to recover the payments.

Once again, there are exceptions, and your attorney can discuss them if they are relevant to your situation.

Fraudulent Transfers

Finally, there is a lookback period for fraudulent transfers.

A fraudulent transfer could be transferring property with the intent to defraud creditors. It could also be selling property for grossly inadequate consideration such as selling your recent model car to your best friend for $100.

Under the Bankruptcy Code, the look back period is two years for fraudulent transfers. However, under Florida’s Statute of Frauds, Fraudulent Transfers and General Assessments (specifically Fla. Stat. § 726.110), the bankruptcy lookback period in Florida is four.

H2: Government Exception

There are exceptions to the general rules outlined here, and one of them is a lookback period that involves the federal government which is usually not bound by state statures of limitations.

For example, the Internal Revenue Code says actions to collect tax must be brought within 10 years after assessment. This means that the trustee is likely to look back 10 years for federal tax information.

Bear in mind that other federal agencies beyond the IRS are also not bound by state laws.

Don’t Trip Up Your Own Bankruptcy

Before you file for a Chapter 7 or Chapter 13 bankruptcy, you need to know what you are getting into. If you are even considering bankruptcy, it would be wise to speak with an experienced Florida bankruptcy lawyer before you make a misstep that will put your bankruptcy in jeopardy.

Of course, there are many options short of bankruptcy. If you would like to discuss your other options or the details of the bankruptcy process including the Florida bankruptcy lookback period, contact us at Ziegler Diamond Law: Debt Fighters for a free consultation by submitting this form. Or just call us directly at (727) 538-4188 in Clearwater, (813) 225-3c111 in Tampa or (352) 600-1326 in Mt. Dora.

Michael Ziegler

Ziegler Diamond Law: Debt Fighters, provides effective legal services to consumers in Clearwater, Florida, and throughout the Tampa Bay area who are facing home foreclosure, unmanageable debts, debt collector harassment, or other debt-related problems.

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