Federal rules and regulations are the backbone of the United States bankruptcy law, but states have the option to exclude or add their own guidelines. These rules that can be set by the states typically involve the assets that are exempt from liquidation when the courts evaluate a person's financial status. In some cases, the debtor's home must be sold in order to repay creditors whereas other states do not require this. Other state variations involve the dischargeable status of certain debts, but the federal guidelines take precedence in those cases.
Florida bankruptcy law heavily favors debtors in regards to the property that they can retain. In fact, Florida has a reputation for being one of the most liberal states in the country for debtors to petition for a discharge of debts. The state government has elected to opt out of the federal regulations concerning the debtor's lawfully retainable property. According to Florida bankruptcy proceedings, you can keep more of your personal property during a bankruptcy than in any other state. As a result, many people who plan to file often move to Florida with their assets in order to take advantage of the state's lenient bankruptcy law.
To see a contrast in the how the bankruptcy law changes from state to state, look at the exemptions that the Maryland law allows. Maryland is stricter in regard to the debtor's assets that must be liquidated in a bankruptcy. For instance, a debtor who files bankruptcy in Maryland is only entitled to keep $500 worth of household goods and furnishings as well as $3,000 of cash in their bank accounts. Also according to Maryland bankruptcy law, debtors can only retain up to $2,500 worth of personal property and the rest must be sold or liquidated so the proceeds can go towards paying the creditors.
Different states have varying guidelines regarding bankruptcy law, but each category has specific regulations, too. In a Chapter 7 bankruptcy, for instance, you can have many of your debts completely discharged so you can get a fresh financial start. On the other hand, Chapter 13 bankruptcy requires you to enter into a repayment agreement that the courts will oversee and make provisions to help you pay off your creditors in a timely manner. Rules also vary as to how much of your property you are allowed to retain when going through a bankruptcy.
Federal bankruptcy law regulations have the final word on any bankruptcy filed in the United States. The guidelines of individual states are meant to allow some leeway in the laws that govern the rights of a debtor to their property. The guidelines in some states are particularly advantageous to the debtor, but other states seem to benefit the creditors. Recent changes to the federal code also favor the rights of the creditors and they try to discourage debtors from filing for a discharge.
Terje Brooks Ellingsen likes to give advice to his readers on personal finance loan as well as provide other personal finance information
http://www.buzzle.com/articles/how-do-you-learn-what-you-need-to-know-about-bankruptcy-law.html
