     tomo | Tuesday, March 07, 2000 - 02:40 pm 
Just a simple question:
Why is bankruptcy filed in US Bankruptcy court but your bankruptcy is subject to the laws of the state you live in? |
| Voigtkampff | Wednesday, March 08, 2000 - 09:11 am
When you say "your bankruptcy is subject to the laws of the state you live in" - I assume that you refer to the fact that state law MAY determine which property is exempt (protected) from creditors. If that is not your question, then please clarify.
I don't know where it is in the bnk code, probably somewhere in 11 USC §522, but every state has the choice of opting out of the federal bankruptcy exemptions and using the state exemptions instead. In my state for example, there is a state statute which formally states that Florida has opted out of the federal bankruptcy exemption scheme. Somewhere in chapter 222, Fla Stat.
This does not mean that a Florida resident cannot use the federal exemptions, just that they cannot use the federal BANKRUPTCY exemptions.
This means that there are some non-bankruptcy federal exemptions that can still be used even if a state has opted out.
If anyone has questions about the exemptions applicable to them, they absolutely must consult with a LOCAL attorney to find out about the available exemptions. |
| tomo | Wednesday, March 08, 2000 - 01:32 pm
Yes, that's my question. So it only applies to which property is exempt (as far as what the state regulates)? |
| Voigtkampff | Wednesday, March 08, 2000 - 04:47 pm
No, it does not ONLY apply to which property is exempt. There can be other differences from state to state, but that is the primary one in my opinion. But first let me finish what I was saying. Bayhouse.com was down for a few hours and I never got to finish.
When you check the Code, §522(b) states that an INDIVIDUAL DEBTOR may exempt the property listed in either subparagraph (1), "or in the alternative" subparagraph (2). So it appears that the state does not choose which exemptions to use! The individual debtor chooses. But then the state can take away that power to choose - which is the case here in Florida. For example, Fla.Stat. 222.20 states that "residents of this state shall not be entitled to the federal exemptions..." And then §222.201 states that despite §222.20, a debtor can use the §522(d)(10) exemptions. Fun reading huh?
The real difference from state to state is that the judges have different views on how to construe and interpret the exact same Code provisions. For example, credit card fraud in bankruptcy has some very significant differences from state to state. And even if the US Supreme Court comes out with a decision that is intended to clear up these differences, the lower judges might interpret that decision differently. This actually happened with the credit card fraud issue. The Supremes came out with the Field v Mans decisions, and there are still 4 different schools of thought on the issue. And even within a state, there can be differences from district to district. That's right. They are called local rules and they can vary from one county to another. |
| tomo | Thursday, March 09, 2000 - 07:03 am
No wonder you need an attorney. Thanks! |
| J. Edgar | Friday, March 10, 2000 - 05:04 pm
Just as a historic note: The Federal Government's jurisdiction in bankruptcy matters is conveyed in the original US Constitution. It is one of the few specific powers granted to the Federal Government in the original constitution. |
