Filing for small business bankruptcy can be complicated because bankruptcy laws are governed by both the federal law and the state government. That’s one of the reasons you need to speak to one of our lawyers at ZinnLaw in Fort Myers, FL. There are a few changes that have been made both to the federal bankruptcy laws and also the bankruptcy laws in Florida in the past few years. Here are some of the recent changes you should know about.
U.S. Bankruptcy Code Changes
The U.S. Bankruptcy Code has an inflationary requirement that dollar amounts and limitations must be adjusted every three years to account for inflation. With U.S. inflation higher than usual the past couple of years, the amounts noted in the code have increased an average of 11% as of April 1, 2022. Other changes made include:
- The total debt amount in the definition of small business debtor was raised from $2,725,625 to $3,024,725.
- The new median family income used on the means test forms, (which are used to decide who qualifies for bankruptcy and also is used to establish payment plans.) was raised. In Florida, the updated U.S. Census Bureau median family income amount will be $55,681 for a single earner, $69,884 for a family of two, $75,057 for a family of three, and $89,206 for a family of four.
- There was an increase in the aggregate claims amount required for a creditor to file for involuntary filing in which creditors are able to request that a debtor file Chapter 7 or Chapter 11 bankruptcy. The increase went from $16,750 to $18,600.
- The maximum aggregate value of assets a debtor can exempt from their IRA is increased from $1,362,800 to $1,512,350.
Specific to filing Chapter 13 bankruptcy, the amount of unsecured debt an individual may have to file was raised from $419,275 to $465,275 and the maximum amount of secured debt has been raised from $1,257,850 to $1,395,875.
- In 2019 the Small Business Reorganization Act was passed which created a whole new subchapter (named Subchapter V, we will provide you with an entire article devoted just to this subchapter) of Chapter 11 bankruptcy specifically for small business. Subchapter V streamlines the bankruptcy process, and makes it easier for small businesses with debts under $7.5 million to restructure their debts while continuing to operate.
Florida Bankruptcy Statute Changes
Florida passed a law in 2018 that sped up the process for foreclosing on certain properties, making it easier for lenders to foreclose on properties with vacant, abandoned homes. In 2019 Florida increased exemption for personal property from $1,000 to $4,000. In 2020 Florida amended its homestead exemption law to allow surviving spouses to inherit the full homestead exemption, regardless of whether they were listed as joint tenants with right of survivorship on the property.
Contact Zinn Law for Assistance
If you are deeply in debt with your small business, you may want to consider filing for bankruptcy. Talk with one of our experienced attorneys. ZinnLaw can help you create a plan for how to handle your business bankruptcy. To find out more about filing for bankruptcy for your small business, call Brian Zinn for a free consultation to look over your case (239) 418-1529, (239) I-1 U-1 LAW or go to our website www.zinn.law to schedule a complimentary consultation.