How Much Property Can I Keep If I File for Bankruptcy in Florida?
Many people worry that filing for bankruptcy will leave them with nothing. In fact, the purpose of bankruptcy is to protect people from losing everything. In a Chapter 7 bankruptcy case, for example, an individual debtor is entitled to keep a certain amount of property away from their creditors, both during and after the bankruptcy process. Such property is considered “exempt.”
Federal vs. State Exemptions
Bankruptcy is governed by federal law, which establishes a default set of exemptions that debtors can use. Individual states, however, may choose to adopt their own exemptions and require their residents to use them. Florida is such a state. This means if you have lived in Florida for at least the two years prior to filing for bankruptcy, you must use Florida’s exemptions.
The good news is Florida’s exemptions are considered quite generous when compared to the federal defaults. A good illustration is the “homestead” exemption. This refers to the amount of equity in your home that may be protected from creditors. The federal exemption only protects $22,975, while Florida exempts an unlimited amount of equity, although the property itself can be no larger than 160 acres (or just one-half of an acre in a municipality).
Another area of concern for many debtors is keeping their car. Florida exempts only $1,000 of equity in “a single motor vehicle.” So if you have a used car not worth more than $1,000, you can keep it. Also note that “equity” is not the same thing as appraised value. If you purchased a used car for $8,000 but owe $7,500 on a loan, your equity in the vehicle is only $500 and is therefore protected by the Florida exemption. In addition, if you and your spouse file for bankruptcy together, your exemption can be doubled, thereby protecting up to $2,000 in equity in a car.
Aside from your home and car, the Florida Constitution also exempts up to $1,000 of “personal property” in a bankruptcy case. This can include furniture, electronics equipment, and artwork. And if you do not use the homestead exemption—say you rent your home—you can claim up to $4,000 in personal property. You can also exempt an unlimited amount of “professionally prescribed health as” required by you or one of your dependents.
Wages & Benefits
If you are the head of a household—that is, you provide “more than one-half of the support” for a child or another dependent—Florida exempts up to $750 per week in paid or unpaid wages. Most pension and retirement benefits are also exempt. Florida also follows federal law which exempts Social Security benefits, veterans benefits, and “local public assistance benefits.”
Get Advice from a Bankruptcy Lawyer
This is just a broad overview of Florida’s bankruptcy exemptions. An experienced Miami bankruptcy attorney can advise you on how exemptions may apply to your situation. Contact the Law Office of Julia Kefalinos today if you are considering bankruptcy and need to speak with someone as soon as possible.