Melbourne bankruptcy lawyers at Bogin, Munns & Munns understand that the Space Coast economy, driven by aerospace, defense, and government contracting, can be unpredictable. When projects end, contracts are not renewed, or major employers restructure, the financial consequences for Melbourne residents and small business owners can be sudden and severe. We provide the legal guidance needed to navigate these challenges.
Bankruptcy is a federal legal process designed for exactly these situations. It creates a structured path out of debt that creditors, on their own, cannot offer. For individuals and businesses in Brevard County, it can be the difference between financial paralysis and a real way forward. We handle individual and business bankruptcy cases from our Melbourne office and offer free consultations.
Call (321) 254-3939.
Should You File for Bankruptcy or Consider Alternatives First?
Bankruptcy is not the only tool for managing unmanageable debt, and not every financial situation calls for it. Before filing, a realistic assessment of the alternatives helps you make an informed decision.
Debt consolidation combines multiple debts into a single loan, often at a lower interest rate, extending the repayment period. It works best when the underlying income can support the consolidated payment and the debt level is manageable relative to income.
Debt settlement involves negotiating with creditors to accept less than the full balance owed. It can reduce total debt but affects credit significantly, may generate taxable income on the forgiven amount, and does not carry the legal protections that bankruptcy provides.
Direct creditor negotiation works in some situations, particularly with medical providers, smaller creditors, and landlords who sometimes prefer a negotiated arrangement over a bankruptcy discharge.
Bankruptcy is most appropriate when debt has reached a level that cannot be realistically resolved through alternatives within a reasonable timeframe, when wage garnishments or creditor lawsuits are active or imminent, or when a mortgage foreclosure is underway and time is the critical factor.
Call (321) 254-3939 to discuss your options before you decide.
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What Types of Bankruptcy Are Available to Melbourne Residents?
The type of bankruptcy that fits your situation depends on whether you are an individual or a business, your income level, the types of debt involved, and what assets you need to protect.
What Does Chapter 7 Accomplish for an Individual Filer?
Chapter 7 eliminates most unsecured debts, including credit cards, medical bills, and personal loans, through a liquidation process that typically concludes within four to six months. Eligibility requires passing the means test, which compares your income to the Florida median. Florida’s strong exemption laws, including an unlimited homestead exemption for a primary residence and protected retirement accounts, mean most individual filers in Melbourne lose no property in a Chapter 7 case.
Who Benefits Most From Chapter 13 in Brevard County?
Chapter 13 is a repayment plan lasting three to five years that allows filers to keep property they would otherwise lose, catch up on mortgage arrears to stop a foreclosure, and discharge remaining eligible debts at the end of the plan. It is best suited to people with regular income who have fallen behind on secured debt, who have property with equity above exemption limits they want to protect, or who do not qualify for Chapter 7 under the means test.
What Is Chapter 11 Bankruptcy and When Does a Business Use It?
Chapter 11 is a reorganization bankruptcy available to businesses and to individuals whose debt exceeds Chapter 13 limits. Unlike Chapter 7, it does not close the business. The debtor continues operating while reorganizing debts under a court-approved plan. Chapter 11 allows a business to renegotiate contracts, restructure secured debt, and eliminate or reduce unsecured obligations, all while keeping the doors open.
It is the appropriate path for a Melbourne business with viable operations but an unsustainable debt load, typically arising from a contract dispute, revenue shortfall, commercial real estate obligations, or equipment financing that no longer fits the business’s financial reality.
What Is Subchapter V Bankruptcy and Why Does It Matter for Small Businesses?
Subchapter V is a streamlined version of Chapter 11 created by the Small Business Reorganization Act, known as the SBRA, enacted in 2019. It was specifically designed to make business reorganization accessible to small businesses that previously found standard Chapter 11 too expensive and complex.
To qualify, a business must have total noncontingent, liquidated debt below $3,024,725, the current threshold as of June 2024. Note that bipartisan legislation introduced in Congress in 2026 proposes to restore the higher $7.5 million limit, but that bill has not yet passed.
For Melbourne’s aerospace subcontractors, technology service companies, and small defense suppliers whose debt falls within the current threshold, Subchapter V provides a realistic reorganization tool that standard Chapter 11 often did not.
An attorney evaluates whether your business qualifies and whether reorganization under Subchapter V is more appropriate than a personal bankruptcy filing.
Call (321) 254-3939 to discuss business bankruptcy options.
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Can Bankruptcy Discharge Student Loans in Florida?
Student loans are generally not dischargeable in bankruptcy, but the rule is not absolute. A growing category of borrowers successfully discharge student loans by proving that repayment constitutes an undue hardship.
What Is the Brunner Test for Student Loan Discharge?
Federal bankruptcy courts in Florida apply the Brunner test to evaluate undue hardship claims for student loan discharge. To succeed, a borrower must prove three things: that they cannot maintain a minimal standard of living for themselves and their dependents if required to repay the loans based on current income and expenses, that this financial situation is likely to persist for a significant portion of the repayment period, and that they have made good faith efforts to repay the loans.
Winning a student loan discharge requires filing a separate adversary proceeding, meaning a separate legal action within the bankruptcy case, and presenting evidence on all three prongs. Courts have historically applied this standard strictly, but recent policy guidance has encouraged more careful evaluation of these cases. An attorney evaluates whether your income, disability status, career history, and repayment effort support an undue hardship claim before filing.
How Does Tax Debt Get Treated in a Brevard County Bankruptcy?
Tax debt occupies a unique position in bankruptcy. Some income tax obligations can be discharged. Others cannot, and understanding the distinction before filing can significantly affect whether bankruptcy achieves what you need.
Which Tax Debts Can Be Discharged in a Florida Bankruptcy?
Federal income tax debt may be dischargeable in Chapter 7 or Chapter 13 when all of the following conditions are met. The tax return for the year in question must have been due at least three years before the bankruptcy filing date. The return must have been actually filed at least two years before the filing date. The tax assessment by the IRS must have occurred at least 240 days before the filing date.
These are known as the three-year rule, the two-year rule, and the 240-day rule. All three must be satisfied simultaneously for the specific tax debt to be dischargeable.
What Tax Debts Cannot Be Discharged in Bankruptcy?
Tax debts that do not meet these timing requirements are non-dischargeable. Trust fund taxes, meaning payroll taxes withheld from employees but not paid to the IRS, are also non-dischargeable regardless of timing. Taxes assessed because of fraud or evasion cannot be discharged. Penalty obligations associated with non-dischargeable taxes also survive bankruptcy.
An attorney maps your specific tax obligations against these rules before filing so you understand exactly what bankruptcy will and will not resolve on the tax side of your debt picture.
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What Happens to Your Business If You File Personal Bankruptcy in Melbourne?
For Melbourne’s independent contractors, sole proprietors, and small business owners, the line between personal and business debt is often blurred. What happens to the business when the owner files personal bankruptcy depends on how the business is structured.
What If You Are a Sole Proprietor?
A sole proprietorship is not a separate legal entity. When a sole proprietor files for bankruptcy, business assets and personal assets are treated as one estate. Business accounts receivable, equipment, inventory, and business real property all become part of the bankruptcy case. Florida’s exemptions apply to personal property, and business assets that are not personally exempt may be liquidated in a Chapter 7 case.
Chapter 13 is often more favorable for sole proprietors because it allows the owner to continue operating the business, protect business assets through the repayment plan, and discharge remaining eligible business debts at the end of the plan period.
What If the Business Is an LLC or Corporation?
A limited liability company or corporation is a separate legal entity from its owner. When the individual owner files personal bankruptcy, the business itself is not directly in the bankruptcy. However, the owner’s interest in the LLC or corporation becomes part of the bankruptcy estate, which can affect the business indirectly. An attorney evaluates the ownership structure, the value of the business interest, and the available exemptions before recommending a filing strategy.
Call (321) 254-3939 to discuss how personal bankruptcy would affect your business.
How Does Bankruptcy Interact With a Divorce in Melbourne?
The intersection of bankruptcy and divorce creates a set of legal complications that require careful sequencing and planning.
The timing of a bankruptcy filing relative to a divorce proceeding matters significantly. Filing bankruptcy before a divorce is finalized can delay divorce proceedings because the automatic stay that takes effect upon filing extends to some divorce-related assets and proceedings. Filing after the divorce is final is often procedurally cleaner.
Some debts assigned in a divorce decree are dischargeable in bankruptcy and some are not. Domestic support obligations, meaning child support and alimony, are never dischargeable in any bankruptcy chapter. Other debts assigned to one spouse in a divorce settlement, such as responsibility for a joint credit card or car loan, may be dischargeable in Chapter 7 in some circumstances but are treated differently in Chapter 13.
When the non-filing spouse is also obligated on a joint debt that is discharged in the filing spouse’s bankruptcy, the creditor can still pursue the non-filing spouse for the full balance. An attorney coordinates the bankruptcy strategy with the divorce proceedings to protect both parties’ positions as much as possible.
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Why Melbourne Residents Choose Bogin, Munns & Munns for Bankruptcy
We have served Brevard County and Central Florida since 1979. Our Melbourne bankruptcy attorneys handle cases in the U.S. Bankruptcy Court for the Middle District of Florida, which administers Brevard County cases. We represent individuals, sole proprietors, and small businesses through every chapter of bankruptcy.
We offer free initial consultations. We tell you honestly whether bankruptcy is the right tool for your situation, which chapter fits your circumstances, and what the process looks like from filing through discharge or confirmation. No attorney’s fees unless we achieve a result, and no commitment required to speak with us.
Our Melbourne office is at 7195 Murrell Rd, Suite 101, Melbourne, FL 32940.
Talk to a Melbourne Bankruptcy Lawyer at Bogin, Munns & Munns
Debt does not have to keep compounding while you figure out what to do. A free consultation gives you clear answers about your options, which chapter of bankruptcy fits your situation, and what the process looks like from start to finish.
We are ready when you are.
Call (321) 254-3939 or contact us online. No obligation.
7195 Murrell Rd, Suite 101, Melbourne, FL 32940 | (321) 254-3939
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