Although federal bankruptcy law mainly regulates bankruptcies, the individual states can have specific guidelines for the process within their jurisdiction. States can typically choose to have their own rules that govern the types of exemptions that the debtor is allowed to keep after filing for a discharge of their debts. For instance, some states will allow debtors to keep their homes no matter how expensive or extravagant they are whereas other states will force the liquidation of property as an attempt to pay off the debts. Other variations include the types of debt that a debtor can discharge, although many of these are federally mandated without exception.



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.

Differences in bankruptcy guidelines are not only state specific, but they are also specific to the type of bankruptcy the debtor chooses. Each category had different regulations and it is up to the debtor to decide which type will best suit their needs. The court will also investigate your financial circumstances and help you decide your best options, whether it is a complete dismissal of your debts or making repayment arrangements. In many cases, you can even retain much of your property rather than having it sold to help pay your creditors.

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.