If you file for bankruptcy in Florida, you may have to sell some of your assets to repay creditors. However, state law allows debtors to protect certain assets using Florida’s bankruptcy exemptions. An experienced bankruptcy lawyer can help you maximize the protection of bankruptcy exemptions in Florida to start your new, debt-free life on the best footing possible.
How Florida’s Bankruptcy Exemptions Work
When a person files for Chapter 7 bankruptcy, they must liquidate (sell) their property and use the proceeds to pay their creditors. However, someone who files for Chapter 7 does not have to sell all their property and start from scratch. Instead, state law provides a list of assets exempt from liquidation that a Chapter 7 debtor may keep through bankruptcy.
Chapter 13 bankruptcy also provides exemption protections. When a person files for Chapter 13 bankruptcy, they may keep all their assets. However, they must pay either their disposable income or the value of all their non-exempt property during their repayment plan – whichever is greater.
When a person files for bankruptcy, they protect assets using the list of exemptions under Florida law. These exemptions either allow debtors to keep property in Chapter 7 bankruptcy or reduce the value of the bankruptcy estate for calculating the repayment plan in Chapter 13 bankruptcy.
How to Keep Your Property After Filing for Bankruptcy in Florida
A person who files for bankruptcy in Florida has several options for keeping their property through their bankruptcy case. Debtors may use Florida’s bankruptcy exemptions to prevent the liquidation of protected property in a Chapter 7 case.
Alternatively, debtors may keep property subject to a secured loan, such as a home subject to a mortgage or a car subject to an auto loan, by reaffirming the loan. When a debtor reaffirms a secured loan, they agree to continue paying it in exchange for the creditor not repossessing or foreclosing on the property securing the loan. However, they must prove to the bankruptcy court that they can afford to keep making payments.
When You Can Use Florida’s Bankruptcy Exemptions
To use Florida’s bankruptcy exemptions in your case, you must establish residency in Florida. Although you can file for bankruptcy in Florida after residing in the state for 180 days, you must live in Florida for at least 730 days before using Florida’s bankruptcy exemptions. If you have not lived in Florida long enough to use the state’s bankruptcy exemptions, you will have to use the bankruptcy exemptions from the state where you previously lived.
How Much Does Bankruptcy Cost in Florida?
Although a person who files for bankruptcy already faces significant financial challenges, filing for bankruptcy does not come without costs. First, a bankruptcy filer must pay filing fees to the bankruptcy court, which usually costs several hundred dollars. However, filers who cannot afford the filing fees may petition the bankruptcy court for a waiver.
Another cost associated with a bankruptcy case comes from legal fees. Although a person does not need to hire an attorney to file for bankruptcy, having legal counsel can make the bankruptcy process smoother and less stressful. At Loan Lawyers, we offer reduced legal fees and reasonable payment plans.
Other costs involved in a bankruptcy case include:
- Administrative fees and trustee surcharges
- Mandatory debtor education course fees
- Fees to obtain copies of credit reports
What Are the Chapter 7 Bankruptcy Florida Exemptions?
Bankruptcy laws in Florida exempt various assets from liquidation in a Chapter 7 bankruptcy.
Homestead Exemption
A homeowner who files for bankruptcy can use Florida’s homestead exemption. Unlike other states that cap the value of their homestead exemptions, Florida allows a homestead exemption of unlimited value. This exemption allows homeowners to protect their primary residence regardless of its value if the property meets specific criteria, including:
- The property may not sit on more than half an acre of land within a municipality or 160 acres outside a municipality.
- The owner must have owned the property for at least 1,215 days before filing for bankruptcy.
- Debtors cannot hold the property in entities like corporations, partnerships, LLCs, or irrevocable trusts.
Other Exemptions
Other bankruptcy exemptions in Florida include:
- The wildcard exemption, which allows a debtor to protect up to $4,000 in property of any kind if they do not use the homestead exemption
- The personal property exemption, which allows a debtor to protect up to $1,000 of personal property (except for a vehicle)
- The motor vehicle exemption, which allows a debtor to protect up to $5,000 in motor vehicle equity
- Prescribed health aids
- Funeral costs
- Prepaid college education trust deposits and other education savings
- Hurricane savings
- Medical/health savings accounts
- Tax refunds and credits
- Certain pension benefits
- Retirement accounts, such as IRAs, 401(k)s, 403(b)s, and ERISA-qualified plans
- Wages, up to $750 per week, 75 percent of a weekly paycheck, or 30 times the federal minimum wage, whichever is highest
- Public assistance benefits, such as Social Security benefits, workers’ compensation, unemployment compensation benefits, reemployment assistance, veterans’ benefits, and crime victim benefits
- Annuity contracts (except for lottery winnings)
- Life insurance
- Disability/illness benefits
- Fraternal benefits society benefits
- Death benefits payable to a specific beneficiary
- Alimony and child support are needed for the debtor and dependents
However, certain rules and exceptions still apply to these exemptions. Talk to a Florida bankruptcy attorney to determine how exemptions may apply in your specific case.
Protect Your Assets: Learn More About Florida Bankruptcy Exemptions with Loan Lawyers
The state of Florida’s bankruptcy exemptions can help you keep and protect some of your most important property when you file for bankruptcy. Contact Loan Lawyers today for a free, confidential consultation with a bankruptcy attorney in FL to discuss your legal options for protecting your assets.
Our team has more than 100 years of combined legal experience helping consumers. We have helped over 7,000 clients in Florida get out of debt and start fresh, eliminating over $100 million in debt and mortgage principal. Through our success and reputation in the courtroom and by utilizing multiple debt and foreclosure solutions, we are in a unique position to maximize leverage for you and help you achieve the best possible result for your situation.
We also make our clients happy! Check out the more than 500 five-star reviews & testimonials online and on our website, such as the client who says we “were professional, almost always available, and made the process [as] smooth as possible.”
Reach out to Loan Lawyers today to find out what we can do for you.
