Frequently Asked Questions Regarding Bankruptcy
Can Income Tax Ever Be Discharged In A Personal Bankruptcy?
Income tax can, in some instances, be discharged in a personal bankruptcy. In order for income taxes to be dischargeable, the tax returns had to have been filed at least two years prior, and the same amount of time would have to have gone by before they can become dischargeable.
What Happens To A Lien In A Bankruptcy?
The impact of bankruptcy on the lien depends upon the way that the lien is treated. There are a variety of different options for liens within bankruptcy, depending on what the lien is against and what the lien priority is. Typically speaking, for a car loan, if a consumer wants to keep the car, then they would have to continue to make payments on the car loan. Often, they would have to agree to an affirmation agreement to reinstate the car loan in spite of the bankruptcy discharge. For mortgages on a primary residence, the rule is often the same, however, in some circumstances, a junior mortgage against a primary residence can be removed from the property. In some circumstances, liens can be crammed down, meaning they will be reduced to the fair market value of the asset.
What Are The Exemptions For Bankruptcy In Florida?
In a Chapter 7 case, in order to obtain the benefit of the discharge, meaning the wiping out of the debt, the tradeoff that the federal government has set is that a consumer is limited on the amount of assets they can keep. The exemptions are the list of property that comes from state and federal law, which says which things you are allowed to keep. In Florida, the abbreviated list includes your homestead or primary residence, a certain allowance of personal property, which includes basic household goods, a limited allowance of vehicle equity, retirement funds, and some other assets. In cases outside of Chapter 7, such as Chapter 13, you are allowed to keep all of your assets, but the exemptions may affect your monthly repayment plan.
What Is The Homestead Exemption?
The homestead exemption, in Florida, reduces the amount that we have to pay in annual taxes, but it also protects a home from collection or creditors and says that you are allowed to keep your primary residence as exempt property when a bankruptcy is filed.
What Is The Means Test?
The means test is the formula that is set out in bankruptcy, which helps tell us whether you qualify for a Chapter 7 case or a Chapter 13 case. It also gives guidance as to the amounts of the Chapter 13 payments.
How Might A Personal Injury Claim Be Affected In A Bankruptcy Case?
If a bankruptcy filer has a personal injury case before the bankruptcy is filed, then that claim is considered property for the purpose of determining whether the filer has to pay into a bankruptcy case. The filer may have to give up any money that they receive from the claim, as part of the bankruptcy commitment.
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