Bankruptcy courts are split on the issue of whether a tax refund payable to a husband and wife filing a joint return is exempt tenants by entireties property in a Chapter 7 bankruptcy. Continue reading
The general rule is that a debtor may exempt proceeds from an exempt asset held in the debtor’s bank account so long as he can trace the funds to the exempt asset. Most bankruptcy courts interpret Florida’s asset exemptions to apply to the exempt assets and its proceeds derived from the asset. Continue reading
Many people have suggested buying a car through a small business corporation they own in order to protect the car from personal creditors. One debtor found that this planning back-fired when he filed Chapter 7 bankruptcy because it disqualified him …
There are several bankruptcy court decisions which considered the debtor’s homestead exemption when the debtor used part of the homestead property to produce income. The general rule is that commercial uses on a homestead property situated within a municipality will disqualify all or part of homestead exemption, but income producing activity does not disqualify homesteads located in the county. Continue reading
Federal courts have permitted the IRS to levy upon a Florida taxpayer’s entireties account to collect taxes owed by one spouse filing an individual tax return. The entireties exemption does not protect the married taxpayer from the IRS. Does it follow that a joint tax refund from the IRS is also not protected entireties property in bankruptcy? Continue reading
Florida common law is that entireties property is exempt from all creditors of either spouse, but it is not exempt from joint creditors. Tenants by entireties property in bankruptcy proceedings has been the subjection of judicial debate over the years when one spouse files bankruptcy, and where the debtor spouse has both individual debts and joint debts with their non-filing spouse. Continue reading
Disability insurance proceeds, from either private insurance or social security, cannot be garnished by a judgment creditor in Florida, and courts will protect the same proceeds after they are deposited in a debtor’s bank account. That’s the law in state court collections, but treatment of disability income is somewhat different in bankruptcy.