Florida Bankruptcy FAQ

Nothing in 11 U.S.C. § 109 conditions eligibility on owing a minimum amount. The practical question is not “do I have enough debt” but “can I realistically resolve this debt in three to five years without court protection.” What the Code does impose is an upper limit for Chapter 13: your noncontingent, liquidated unsecured debts must be under $526,700 and your secured debts under $1,580,125 (11 U.S.C. § 109(e), amounts per the Judicial Conference adjustment effective April 1, 2025). Chapter 7 has no debt ceiling at all.

Chapter 7 is a trustee-administered liquidation — but in Florida, with the state’s exemptions, most consumer Chapter 7 cases are “no asset” cases where the trustee sells nothing. Chapter 13 is a wage-earner plan: you keep everything, including non-exempt property, and pay creditors out of future income under 11 U.S.C. §§ 1322 and 1325. Chapter 13 is also the only chapter that lets an individual cure a mortgage arrearage over time and stop a foreclosure permanently. Chapter 11 is for businesses and for individuals whose debts exceed the § 109(e) Chapter 13 limits; Subchapter V is a streamlined, cheaper version of Chapter 11 for small businesses (11 U.S.C. § 1189).

The credit-report entry is governed by 15 U.S.C. § 1681c(a)(1), which allows reporting of a bankruptcy case for ten years measured from the date of entry of the order for relief — not from your discharge. The successive-discharge bar is 11 U.S.C. § 727(a)(8): no Chapter 7 discharge if you received one in a case commenced within eight years before the new filing. And filings are public records searchable through PACER. Against that: the automatic stay stops collection immediately, and the discharge is permanent.

Fla. Stat. § 222.21 exempts assets in plans qualified under IRC §§ 401(a), 403(a), 403(b), 408, 408A, 409, 414, 457(b), and 501(a), and expressly extends that protection to inherited accounts. Federal law adds 11 U.S.C. § 522(b)(3)(C), which is available even to debtors using state exemptions. Traditional and Roth IRAs are capped in bankruptcy at $1,711,975 in the aggregate under § 522(n) (rollover contributions and earnings on them are excluded from the cap, as are SEP and SIMPLE IRAs). A withdrawal converts exempt retirement money into cash in a bank account, which is far less protected — and adds income tax and, if you are under 59½, an early-withdrawal penalty. Talk to counsel before you liquidate anything.

15 U.S.C. § 1681c(a)(1) caps reporting of the bankruptcy case at ten years from entry of the order for relief — not from discharge, which is a distinction that matters in a Chapter 13 where discharge comes years after filing. Collection accounts and most other adverse items are capped at seven years under § 1681c(a)(4) and (a)(5). One correction worth knowing: the widely repeated claim that a completed Chapter 13 “falls off after seven years” describes a voluntary practice of the nationwide credit bureaus, not a legal entitlement. Section 1681c(a)(1) permits ten years for any title 11 case regardless of chapter, and the CFPB’s own guidance says only that bankruptcies “can stay on your report for up to 10 years” without distinguishing chapters (CFPB). Plan around the statute, not around the bureaus’ current courtesy.

Those figures come from the U.S. Trustee Program’s official means testing data set for cases filed on or after July 15, 2026. If your annualized current monthly income is at or below the applicable figure, no presumption of abuse arises and the analysis is over. If you are above it, you complete the full 11 U.S.C. § 707(b)(2) calculation, deducting IRS-standard and actual allowed expenses. Many above-median households still qualify for Chapter 7 after those deductions — high mortgage, high car payments, large family size, and secured-debt payments all reduce the disposable-income figure that drives the presumption.

The mechanics are in 11 U.S.C. § 707(b). Above-median filers deduct IRS National and Local Standards for food, housing, transportation, and other categories, plus actual payments on secured and priority debts. The presumption arises only if the resulting 60-month disposable income exceeds the statutory thresholds — currently $17,150, or $10,275 where that amount is at least 25% of nonpriority unsecured claims. Even then, § 707(b)(2)(B) allows rebuttal by demonstrating special circumstances such as a serious medical condition or a call to active military duty.

The pre-filing requirement is 11 U.S.C. § 109(h). Narrow exceptions exist: § 109(h)(3) permits an exigent-circumstances certification if you requested services but could not obtain them within seven days of the request (that exemption expires 30 days after filing, extendable for cause by up to 15 more days), and § 109(h)(4) covers incapacity, disability, and active duty in a combat zone. Approved agencies are listed by state and judicial district on the U.S. Trustee’s § 111 approved-agency list. The post-filing debtor education course is required by § 1328(g) in Chapter 13 and enforced in Chapter 7 through Fed. R. Bankr. P. 4004(c), which withholds discharge until the completion statement is filed. The Southern District of Florida directs that the certification be filed within 60 days after the first date set for the § 341 meeting (S.D. Fla.).

11 U.S.C. § 727(a)(8) bars a Chapter 7 discharge where the debtor received one in a case commenced within eight years before the new petition. Section 727(a)(9) sets a six-year bar following a Chapter 12 or 13 discharge, with exceptions where plan payments reached 100% of allowed unsecured claims, or at least 70% under a good-faith best-effort plan. Chapter 13’s bars are in § 1328(f): four years from the filing of a prior Chapter 7, 11, or 12 case, two years from the filing of a prior Chapter 13. All of these periods run filing date to filing date — not from your prior discharge date. That distinction is the single most common error in published bankruptcy content, and getting it wrong by months can cost a client a discharge.

Fla. Const. art. X, § 4(a)(1) exempts homestead up to one-half acre of contiguous land inside a municipality, or 160 contiguous acres outside one, with no limit on value. Three important qualifications. First, the exemption does not defeat a mortgage — you still have to pay the mortgage to keep the house, and the lender’s lien survives your discharge. Second, the Constitution’s own exceptions cover taxes and assessments, obligations contracted for the purchase, improvement, or repair of the property, and obligations for labor performed on it. Third, federal law caps the exemption at $214,000 for any interest you acquired during the 1,215 days before filing, unless the interest was transferred from a prior principal residence within Florida (11 U.S.C. § 522(p)). Separately, § 522(o) reduces the exemption by value you moved into the homestead within the prior ten years with intent to hinder, delay, or defraud a creditor.

Fla. Stat. § 222.20 provides that Florida residents are not entitled to the exemptions in 11 U.S.C. § 522(d). But Fla. Stat. § 222.201 permits a debtor to claim the § 522(d)(10) benefits — Social Security, unemployment, veterans’ and disability benefits, alimony and support, and pension payments to the extent reasonably necessary for support. Whether Florida’s list applies to you at all depends on 11 U.S.C. § 522(b)(3)(A): you use the exemption law of the state where you were domiciled for the 730 days before filing. If you moved within that window, you use the law of the state where you were domiciled during the 180 days preceding the 730-day period — which is why recent arrivals to Florida sometimes have to use another state’s exemptions.

Fla. Stat. § 222.25(1) exempts a debtor’s interest, not to exceed $5,000, in a single motor vehicle as defined in § 320.01(1). The increase was made by ch. 2024-110, Laws of Florida. Expect to see $1,000 on competing sites and in older treatises — that figure is obsolete. What matters is equity, not sticker value: if you owe $18,000 on a car worth $19,000, your exposed equity is $1,000 and it fits comfortably. Financed vehicles also require you to state your intention under § 521(a)(2) — reaffirm, redeem, or surrender.

Fla. Stat. § 222.25(4) conditions the $4,000 exemption on the debtor “not claim[ing] or receiv[ing] the benefits of a homestead exemption under s. 4, Art. X of the State Constitution.” The Florida Supreme Court in Osborne v. Dumoulin, 55 So. 3d 577 (Fla. 2011), and the Eleventh Circuit in In re Valone, No. 14-11457 (11th Cir. Apr. 29, 2015), held that owning homestead property does not by itself foreclose the wildcard — courts examine whether the homestead exemption, or some other source such as the automatic stay, is what is actually protecting the residence. This is genuinely fact-specific and has produced conflicting outcomes; it is one of the places where a Florida-specific analysis changes the result materially. The wildcard also does not apply to claims for child support or spousal support.

Fla. Stat. § 222.21 covers plans qualified under IRC §§ 401(a), 403(a), 403(b), 408, 408A, 409, 414, 457(b), and 501(a), including inherited accounts and accounts transferred in a divorce, subject to exceptions for a QDRO alternate payee and a surviving spouse’s elective share. Fla. Stat. § 222.22 covers § 529 qualified tuition programs including the Florida Prepaid College Program, medical and health savings accounts, Coverdell accounts, and ABLE accounts. On the federal side, traditional and Roth IRAs are capped at $1,711,975 in the aggregate under 11 U.S.C. § 522(n), excluding rollover contributions and earnings on them.

Fla. Stat. § 222.11 defines “head of family” as a natural person providing more than one-half the support for a child or other dependent. All disposable earnings of a head of family at or below $750 per week are exempt from attachment or garnishment. Above $750, a head of family’s earnings cannot be garnished unless the person agreed in writing in the specific 14-point-type waiver form the statute prescribes — and even then the federal cap in 15 U.S.C. § 1673 applies. A person who is not a head of family is subject only to the federal cap. Exempt wages deposited in a financial institution stay exempt for six months if traceable and not commingled. On filing, 11 U.S.C. § 362(a) stops the garnishment as a matter of law.

Fla. Stat. § 222.25(3) exempts a refund or credit received or to be received under IRC § 32 — the earned income credit — including traceable deposits of it, but not against child or spousal support claims. The non-EIC portion of a refund attributable to pre-petition earnings is generally estate property that a Chapter 7 trustee may claim, which is exactly why the IRS’s own bankruptcy FAQ addresses “why did the bankruptcy trustee request my refund.” Timing your filing relative to the tax year is one of the more consequential planning decisions in a Florida consumer case.

11 U.S.C. § 522(b)(3)(B) exempts an interest held as a tenant by the entirety to the extent that interest is exempt from process under applicable nonbankruptcy law, and Florida law supplies that content. The Eleventh Circuit confirmed the point directly in Musolino v. Sinnreich (In re Sinnreich), 391 F.3d 1295 (11th Cir. 2004), holding that property a Florida debtor holds with a non-filing spouse as tenants by the entireties is exempt under § 522(b), and that United States v. Craft, 535 U.S. 274 (2002), is confined to federal tax collection — extending it to ordinary bankruptcy creditors would render the exemption superfluous. On the state-law side, Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001), established that where a bank signature card does not expressly disclaim entireties ownership, a presumption arises that an account titled in both spouses’ names is held as a tenancy by the entireties, and a creditor must rebut that presumption by a preponderance of the evidence. Two cautions we give every client: entireties treatment does not block a creditor holding a joint claim against both spouses, and whether a particular asset actually qualifies turns on how it was titled and acquired. Beal Bank also held that “joint tenancy with right of survivorship” wording alone is not an express disclaimer, that “or” versus “and” is not dispositive, and that where the bank never offered entireties ownership no presumption arises at all. This is not a self-help analysis.

The exceptions are catalogued in 11 U.S.C. § 523(a). The major categories: taxes described in § 507(a)(3) or (a)(8) and taxes for which no return was filed or a return was filed late within two years of the petition; money obtained by false pretenses or actual fraud; fraud or defalcation in a fiduciary capacity, embezzlement, larceny; domestic support obligations; willful and malicious injury; governmental fines and penalties; educational loans absent undue hardship; death or personal injury from operating a vehicle while intoxicated; criminal restitution under title 18; and debts for securities-law violations. Three of these — § 523(a)(2), (a)(4), and (a)(6) — are only excepted if a creditor actually files an adversary proceeding within the deadline in Fed. R. Bankr. P. 4007(c), 60 days after the first date set for the § 341 meeting. If no one sues, those debts are discharged.

Medical debt appears nowhere in 11 U.S.C. § 523(a). It is treated the same as credit card debt. Two practical notes. First, a medical debt that has already been reduced to a judgment and recorded as a judgment lien may require a separate motion under § 522(f) to remove the lien — the discharge alone does not clear the lien. Second, treatment you receive after filing is not covered by the discharge, so ongoing or anticipated care affects timing.

11 U.S.C. § 523(a)(8) excepts educational loans unless excepting them would impose an undue hardship on the debtor and the debtor’s dependents. The Eleventh Circuit, which governs Florida, adopted the Brunner test in Hemar Insurance Corp. of America v. Cox (In re Cox), 338 F.3d 1238 (11th Cir. 2003). All three prongs must be met: you cannot maintain a minimal standard of living if forced to repay; additional circumstances indicate that will persist for a significant portion of the repayment period; and you have made good-faith efforts to repay. Since November 2022, the Justice Department has operated under published guidance — still posted as of March 17, 2026, with an attestation form revised May 2025 — that structures how government attorneys evaluate and settle these cases, and it has made federal-loan discharges meaningfully more attainable in practice. Two limits worth stating plainly: that guidance is Justice Department policy, not a change to the legal standard, and it does not apply to private student loans.

11 U.S.C. § 523(a)(1) excepts taxes of the kinds in § 507(a)(3) and (a)(8), taxes for which a required return was never filed, taxes filed late and within two years before the petition, and taxes as to which the debtor filed a fraudulent return or willfully attempted to evade. The dischargeability analysis turns on multiple overlapping lookback periods and is genuinely technical. A separate point clients consistently miss: a recorded federal tax lien survives the discharge even where the underlying tax liability is discharged — the IRS’s bankruptcy FAQ addresses lien release as a distinct process.

11 U.S.C. § 523(a)(5) excepts domestic support obligations without qualification. Support claims are also first-priority under § 507(a)(1). And § 362(b)(2) exempts from the automatic stay proceedings to establish paternity, establish or modify a domestic support obligation, determine custody or visitation, dissolve a marriage, and address domestic violence — plus collection of support from property that is not estate property, income withholding, license suspension, tax refund interception, and enforcement of medical obligations. In Chapter 13, you must also certify that all amounts due under a support order have been paid before you can receive a discharge (§ 1328(a)).

11 U.S.C. § 523(a)(15) excepts debts to a spouse, former spouse, or child that are not support and that were incurred in the course of a divorce or separation or under a separation agreement or divorce decree. But § 1328(a), which lists the exceptions to a completed-plan Chapter 13 discharge, incorporates § 523(a)(5) and omits § 523(a)(15). The consequence: an equitable-distribution or property-settlement obligation that survives Chapter 7 can be discharged through a fully performed Chapter 13 plan. Support obligations remain nondischargeable in both.

11 U.S.C. § 523(a)(16) excepts fees or assessments that become due and payable after the order for relief to a condominium, cooperative, or homeowners association with respect to the debtor’s interest — and expressly provides that nothing in the paragraph excepts a pre-petition assessment. This matters enormously in Florida, where association assessments and association-fee litigation drive a large share of consumer distress. The practical planning point is that post-petition liability continues to accrue until title actually transfers, which can take many months in a surrender scenario.

The Supreme Court held in Dewsnup v. Timm, 502 U.S. 410 (1992), that a Chapter 7 debtor cannot use § 506(d) to strip a lien down to the collateral’s value, and extended that in Bank of America, N.A. v. Caulkett, 575 U.S. 790 (2015), to bar stripping off a wholly underwater junior mortgage in Chapter 7. There is a separate and genuinely useful tool: 11 U.S.C. § 522(f) allows avoidance of a judicial lien, and of certain nonpossessory non-purchase-money security interests in household goods and tools of the trade, to the extent the lien impairs an exemption — brought by motion under Fed. R. Bankr. P. 4003(d). Section 522(f) does not reach a judgment arising out of a mortgage foreclosure. Keep the two mechanisms distinct: judicial-lien avoidance is available in Chapter 7; mortgage strip-down is not.

Caulkett forecloses the Chapter 7 route. Chapter 13 operates differently because §§ 506(a) and 1322(b)(2), read together with Rule 3012 valuation practice, permit reclassification where the senior lien exceeds the property’s value, leaving nothing securing the junior lien. This requires a valuation motion and a plan that provides for the treatment, and the strip-off is generally contingent on completing the plan.

The fees break down as $245 plus a $78 administrative fee plus a $15 trustee surcharge for Chapter 7; $235 plus $78 for Chapter 13; and $1,167 plus $571 for Chapter 11 (Bankruptcy Court Miscellaneous Fee Schedule; confirmed locally at S.D. Fla. Chapter 7 and S.D. Fla. Chapter 13). A Subchapter V case carries no separate filing fee — it is a Chapter 11 case and pays Chapter 11 fees. Reopening a closed Chapter 7 case costs $245 plus the $15 trustee fee.

The waiver standard is 28 U.S.C. § 1930(f), using Official Form 103B. Installments use Official Form 103A; under Fed. R. Bankr. P. 1006(b), the clerk must accept an individual’s petition accompanied by a completed installment application, the court may set up to four installments, all payments must be made within 120 days of filing, and the last installment cannot go beyond 180 days even with an extension for cause. Rule 1006(b)(3) prohibits paying your attorney anything further until the filing fee is paid in full. Both forms are on the judiciary’s bankruptcy forms index. In the Southern District of Florida, only individual debtors may apply, both joint debtors must sign, and the clerk will not accept an installment application if fees remain unpaid from a prior case unless those are paid at the same time (S.D. Fla.).

That figure comes from the court’s Guidelines for Compensation for Professional Services or Reimbursement of Expenses by Attorneys for Chapter 13 Debtors, Local Form CG-6, revised June 1, 2026, adopted under S.D. Fla. Local Rule 2016-1. Specific additional services carry their own flat rates with no fee application required: $750 for a stay motion under § 362(c)(3)(B) or (c)(4)(B), $750 to value a vehicle, $1,000 to value real property, $750 for a § 522(f) lien-avoidance motion, $750 for a mortgage modification outside the court’s mediation program, $750 for a post-confirmation modification, and $750 for a hardship discharge. Elsewhere in Florida: the Northern District sets the presumptively reasonable fee at $5,000 by Administrative Order 23-006. In the Middle District, the current Tampa and Fort Myers order sets $5,000 plus up to $50 per month for plan monitoring, effective in cases filed on or after August 11, 2023 (Amended Order, No. 8:07-mp-00002-CED) — though that court’s own Procedure Manual, last revised in 2020, still shows $4,500 district-wide. Confirm the operative figure for your division before relying on it. Note what these numbers are and are not: they are the fee a court will approve without a formal application, not a market rate or a quote.

Fed. R. Bankr. P. 2003(a) requires the U.S. Trustee to set the § 341 meeting no fewer than 21 and no more than 40 days after the order for relief in a Chapter 7 case. The deadline to object to discharge and to file most dischargeability complaints is 60 days after the first date set for that meeting (Rules 4004(a) and 4007(c)). Once those deadlines pass, Rule 4004(c) requires the court to promptly grant the discharge unless one of the enumerated obstacles applies — an objection is pending, the filing fee is unpaid, the financial management course certificate has not been filed, an unresolved reaffirmation presumption exists, and so on. Asset cases take longer because the trustee must administer and liquidate property.

The meeting is required by 11 U.S.C. § 341 and scheduled under Rule 2003 — within 21 to 40 days of filing in Chapter 7 and 21 to 50 days in Chapter 13. The U.S. Trustee has implemented virtual meetings by Zoom nationwide, and the Southern District of Florida has used the Zoom platform for all § 341 meetings scheduled on or after October 1, 2023 (S.D. Fla. Zoom locations). Florida sits in U.S. Trustee Region 21. Expect questions about whether you reviewed and signed your petition, whether you listed all assets and creditors, what caused the filing, recent transfers of property, and recent purchases or sales. Creditors may attend but rarely do in consumer cases.

The Southern District’s divisions are set by local rule: Miami Division covers Miami-Dade and Monroe; Fort Lauderdale Division covers Broward County; West Palm Beach Division covers Highlands, Indian River, Martin, Okeechobee, Palm Beach, and St. Lucie (S.D. Fla. divisions). A petition must be filed in the division where the debtor’s domicile, residence, principal place of business, or principal assets are located (S.D. Fla. Local Rule 1071-1/1073-1). District-level venue is governed by 28 U.S.C. § 1408, which looks to where you were domiciled, resided, or held principal assets for the 180 days before filing. Florida has three bankruptcy districts — Northern, Middle, and Southern.

The Southern District states that “pro se debtors and bankruptcy petition preparers are ineligible to register to use CM/ECF,” though debtors may sign up for Debtor Electronic Bankruptcy Noticing to receive court notices by email instead of U.S. mail (S.D. Fla. FAQs). Pro se filers must also present photo identification when filing the petition (S.D. Fla. before you file). Official Forms must be used without alteration under Rule 9009 (S.D. Fla. forms; national bankruptcy forms). The consequences of an exemption claimed incorrectly, a debt scheduled incorrectly, or a means test computed incorrectly are borne entirely by the filer. See also the Florida Bar’s Consumer Bankruptcy in Florida pamphlet.

The Southern District’s Chapter 7 filing page lists what is due at filing and what is due within 14 days: the filing fee, original wet signatures, Schedules A/B through J-2, the Statement of Financial Affairs, the means test form, the statement of intention for secured property, and the Declaration Regarding Payment Advices with 60 days of pay statements. Missing the 14-day deadline is a common cause of dismissal.

11 U.S.C. § 362(a) stays the commencement or continuation of actions against the debtor, enforcement of pre-petition judgments, acts to obtain or control estate property, lien creation or enforcement, collection of pre-petition claims, setoff, and Tax Court proceedings. It operates by force of law the moment the petition is filed. Key exceptions under § 362(b): criminal proceedings, most domestic relations proceedings, and continuation of a residential eviction where the landlord obtained a possession judgment before the petition date, subject to the § 362(l) cure procedure. If a creditor keeps collecting after being notified, that is a stay violation with remedies under § 362(k).

11 U.S.C. § 362(c)(3) terminates the stay on the 30th day after filing where one prior case of the debtor was pending and dismissed within the preceding year; a motion to extend must be filed and heard before the 30 days expire, on a showing that the new case was filed in good faith as to the creditors to be stayed. Section 362(c)(4) provides that where two or more such cases were dismissed in the prior year, the stay does not go into effect, and a party in interest must move within 30 days to have it imposed. These deadlines are unforgiving and are the reason repeat filings require immediate action rather than a wait-and-see approach.

Filing before the sale stops it under § 362(a). In Chapter 7 the lender can move for relief from the stay and proceed once the case concludes, because Chapter 7 gives you no mechanism to cure a default. Chapter 13 does: you cure the arrearage over the life of the plan while maintaining ongoing payments. The mortgage lien survives your discharge regardless of chapter — the exemption protects your equity, not your obligation to pay. A separate point worth stating: a foreclosure deficiency judgment is ordinary unsecured debt and is dischargeable.

11 U.S.C. § 362(b)(22) excepts from the stay continuation of an eviction by a residential lessor who obtained a judgment for possession before the petition date. Section 362(l) provides a limited path: the debtor may certify that state law permits cure of the entire monetary default and deposit the rent that would become due in the 30 days after filing with the clerk. The timing is tight and the certification requirements are exact. If no possession judgment had been entered when you filed, the stay applies normally.

11 U.S.C. § 1325(b)(4) sets the applicable commitment period at three years, or not less than five years if the annualized current monthly income of the debtor and spouse combined is at or above the applicable state median family income (for households over four, the median for a family of four plus $925 per month per additional person). A shorter period is allowed only if the plan pays all allowed unsecured claims in full. Section 1322(d) caps above-median plans at five years and below-median plans at three, extendable to five for cause.

11 U.S.C. § 1326(a)(1) requires the debtor to commence payments not later than 30 days after the date of filing of the plan or the order for relief, whichever is earlier, unless the court orders otherwise. Filers are consistently caught off guard by this: payments start well before confirmation, and missing early payments is a leading cause of pre-confirmation dismissal.

11 U.S.C. § 1329 allows post-confirmation modification of payment amounts and terms. Conversion to Chapter 7 is available under § 1307. A hardship discharge under § 1328(b) is available in narrow circumstances where failure to complete the plan is not the debtor’s fault. In the Southern District of Florida, the court’s fee guidelines specifically contemplate a $750 flat fee for a post-confirmation modification and $750 for a hardship discharge, which signals how routine these motions are (CG-6). The mistake to avoid is silence — the earlier you raise a payment problem, the more options remain.

This is driven by plan terms, local practice, and trustee policy rather than a single statute, and it varies by district and by standing trustee. It is a question to resolve with counsel before confirmation, because the answer is negotiable in some circumstances and structural in others. Florida does separately exempt the earned income credit portion of a refund under Fla. Stat. § 222.25(3).

This comes from the hanging paragraph following 11 U.S.C. § 1325(a), which makes § 506 inapplicable to a purchase-money security interest in a motor vehicle acquired for the debtor’s personal use within 910 days before filing. Outside that window, cramdown to the vehicle’s value is generally available. The practical effect is that filing timing relative to the purchase date can change the amount you pay by thousands of dollars.

Eligibility turns on the “small business debtor” definition in 11 U.S.C. § 101(51D): aggregate noncontingent liquidated secured and unsecured debts as of the filing date not exceeding the ceiling, excluding debts owed to affiliates or insiders, with not less than 50% arising from commercial or business activities. The CARES Act raised the ceiling to $7,500,000; that increase was extended twice and expired June 21, 2024, reverting to the original figure as adjusted — currently $3,424,000 (U.S. Trustee Program, Subchapter V, page updated July 17, 2026; amount per the April 1, 2025 adjustment). Legislation to restore the $7.5 million ceiling — S. 3977, introduced March 3, 2026 — was placed on the Senate Legislative Calendar on March 4, 2026 and has not been enacted (Congress.gov). Any site still telling you the limit is $7.5 million has not been updated in two years.

11 U.S.C. § 1189(a) gives the debtor the exclusive right to file a plan, eliminating the competing-plan risk of ordinary Chapter 11. A Subchapter V trustee is appointed to facilitate a consensual plan rather than to displace management. The court must hold a status conference within 60 days of the order for relief, and the debtor must file a report on its consensual-plan efforts at least 14 days before it (§ 1188). The tradeoff is speed pressure: the plan must be filed within 90 days of the order for relief, extendable only where the need is attributable to circumstances for which the debtor should not justly be held accountable (§ 1189(b)).

Ordinary Chapter 11 leaves management in place as debtor in possession absent cause for appointing a trustee. Subchapter V preserves that structure while adding a Subchapter V trustee to help negotiate a consensual plan (11 U.S.C. § 1183). Court approval is required for transactions outside the ordinary course, for use of cash collateral, and for post-petition financing.

A guarantee is a separate contractual obligation of the guarantor. The entity’s discharge under 11 U.S.C. § 1141 does not reach it. This is why business owners routinely need to evaluate an entity filing and a personal filing as two related but distinct decisions — and why the sequencing between them matters. Guarantees of SBA, EIDL, and merchant cash advance obligations are among the most common drivers of Florida small-business owner filings, and a guarantee tied to alleged misrepresentation in the loan application can draw a nondischargeability challenge under § 523(a)(2).

11 U.S.C. § 507(a)(4) grants fourth priority to wages, salaries, and commissions — including vacation, severance, and sick leave pay — earned within 180 days before the petition date or the date the business ceased operations, whichever is first, capped at $17,150 per individual (amount per the April 1, 2025 adjustment). Section 507(a)(5) grants fifth priority to employee benefit plan contributions for services in the same 180-day window, capped per plan at the number of covered employees multiplied by $17,150, reduced by amounts already paid under (a)(4) and by amounts paid to other plans. Domestic support obligations and administrative expenses rank ahead of both.

This distinction is in the text and it is important. 11 U.S.C. § 525(a) prohibits a governmental unit from denying, revoking, suspending, or refusing to renew a license, permit, or charter, and from denying employment to, terminating the employment of, or discriminating with respect to employment against a person because they are or were a debtor. Section 525(b), which governs private employers, prohibits only terminating employment or discriminating with respect to employment — the words “deny employment to” do not appear. Section 525(c) separately prohibits denial of student grants and loans on that basis. Many published FAQs flatly state that “an employer cannot refuse to hire you because you filed bankruptcy,” which is overbroad as applied to private employers.

PACER provides public electronic access to federal court records at $0.10 per page, capped at $3.00 per document, with fees waived for any quarter in which a user accrues $30 or less. Practically, the people who learn of your filing are your scheduled creditors, who receive notice from the court. An employer learns of it only if it is a scheduled creditor, if there is a wage garnishment to be released, or if a payroll deduction order is entered in Chapter 13.

The waiting periods differ by program, and the date they measure from matters as much as the length.

FHA requires two years from the Chapter 7 discharge date to the date the case number is assigned, and will accept as little as 12 months where the bankruptcy was caused by extenuating circumstances beyond the borrower’s control and the borrower documents an ability to manage finances responsibly. For Chapter 13, FHA is explicit: a Chapter 13 “does not disqualify a Borrower from obtaining an FHA-insured Mortgage, if at the time of case number assignment at least 12 months of the payout period under the bankruptcy has elapsed,” provided payment performance has been satisfactory and the borrower “has received written permission from bankruptcy court to enter into the mortgage transaction” (HUD Handbook 4000.1, § II.A.5.a).

VA sets no fixed waiting period and applies a credit-risk test instead: the fact that a bankruptcy exists in a borrower’s (or spouse’s) credit history does not in itself disqualify the loan. A Chapter 7 discharged more than two years before closing may be disregarded. One to two years out requires both satisfactory post-bankruptcy credit and a cause beyond the borrower’s control. Within 12 months, VA guidance indicates it will generally not be possible to find a satisfactory credit risk. In an active Chapter 13, VA may give favorable consideration once the borrower has made at least 12 months of payments and the trustee or judge approves the new credit (VA Lender’s Handbook M26-7, ch. 4).

USDA treats a Chapter 7 discharged or dismissed more than 36 months before the loan application as not adverse credit, and permits an active Chapter 12 or 13 case where 12 months of the plan have elapsed, all payments were made on time, and the court or trustee gives written permission (HB-1-3555, Attachment 10-A).

Fannie Mae requires four years from a Chapter 7 or 11 discharge or dismissal, reduced to two with documented extenuating circumstances; two years from a Chapter 13 discharge with no exception available; four years from a Chapter 13 dismissal; and five years where there was more than one filing in the past seven years (Selling Guide B3-5.3-07). Freddie Mac’s requirements are comparable; consult the current text of Guide § 5202.1 rather than any secondhand figure.

Renting is a separate question governed by private landlord screening, not by these programs. A bankruptcy on a credit report can complicate an application, but many landlords weigh current income and rental history more heavily. Note also that these program requirements change — verify the current handbook text before relying on any figure here.

Clearance eligibility is adjudicated under Security Executive Agent Directive 4, the National Security Adjudicative Guidelines, effective June 8, 2017. Guideline F — Financial Considerations — states the concern this way: failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, and notes that an individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds (SEAD 4, ¶ 18). The disqualifying conditions in ¶ 19 include inability to satisfy debts, unwillingness to satisfy debts regardless of ability, a history of not meeting financial obligations, and consistent spending beyond one’s means. Bankruptcy is not among them.

Two of the mitigating conditions in ¶ 20 are directly on point. Paragraph 20(d) mitigates where the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Paragraph 20(b) mitigates where the conditions that resulted in the financial problem were largely beyond the person’s control (loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, predatory lending, or identity theft), and the individual acted responsibly under the circumstances (SEAD 4, ¶ 20). A Chapter 13 plan being performed, or a completed Chapter 7 that resolved the debt, maps onto that language. In practice, unresolved delinquent debt is frequently the greater problem, and adjudicators are directed to weigh the whole person rather than any single event.

One technical caution: the parallel text codified at 32 C.F.R. § 147.8 is an older version of Guideline F and differs in wording. SEAD 4 is the operative authority. Anyone holding or seeking a clearance should also confirm self-reporting obligations under their agency’s own rules before filing, because reporting requirements are separate from the adjudicative guidelines.

11 U.S.C. § 525(a) covers licenses, permits, charters, franchises, and other similar grants by governmental units, and extends to conditioning or discriminating with respect to such a grant. The word doing the work is “solely” — a licensing decision grounded in independent conduct, including conduct that also gave rise to the debt, is a different question.

The structural differences are what matter. Bankruptcy provides an automatic stay under § 362 that stops all collection immediately, a discharge that is binding on all scheduled creditors, and statutory exemptions that protect specific assets. Settlement provides none of that: any creditor that declines to settle can continue suing and garnishing, and forgiven debt is generally taxable income unless an exclusion applies — whereas debt discharged in bankruptcy is not. Settlement also typically requires you to go delinquent first, which damages credit while offering no protection during the process. Where settlement genuinely wins is where the debt load is modest, the number of creditors is small, and funds are available.

The risk to name explicitly for Florida homeowners: consolidating unsecured debt into a home equity loan converts debt that Chapter 7 would discharge into debt secured by a lien on your homestead — a lien that survives a later discharge. Given that Florida’s homestead exemption has no dollar cap, moving unsecured debt onto the house is one of the more consequential unforced errors a Florida consumer can make. Run the bankruptcy analysis before, not after.