Common Bankruptcy Exemptions in Florida
Many areas of the United States have a series of exemptions that are designed to protect personal property as you file for bankruptcy. The type of bankruptcy that you choose to file under will often determine what can happen to any of your non-exempt property.
With a chapter 13 bankruptcy case you’ll be able to keep all of the assets that you own but you will have to stick to a repayment plan. This means paying the value of any non-exempt property equity, or regularly paying out of your disposable income. Whichever value is more will be the cost you end up paying under the settlement.
Under Chapter 7 bankruptcy you will be forced to sell off any non-exempt property and then distribute these proceeds amongst your creditors as part of your bankruptcy agreement.
To prepare for the process of filing for bankruptcy it’s always best to know more about what bankruptcy exemptions are available to you in Florida. There are a series of federal bankruptcy exemptions but the exemptions that you qualify for as a Florida resident will be based off of statewide requirements.
Florida bankruptcy exemptions:
Florida exemptions are used under bankruptcy code over federal bankruptcy exemptions. The Florida bankruptcy court is required to stipulate the exemptions that are available for your bankruptcy. It’s likely that you will find a Florida bankruptcy exemption to be favorable as in most cases you can exempt equity in residential property as long as it meets guidelines under Florida law. Florida also has exemptions on an unlimited amount for the annuities and cash surrender value on your life insurance policies.
In order to qualify for exemption on your domicile:
You need to be a Florida resident for at least 730 days before you file for bankruptcy in the state of Florida. If you are living in a different state throughout the past two years, you’d be using the bankruptcy exemptions from the other state or wherever you lived the most for the past 180 days in the two-year period that will be examined for filing.
The Homestead exemption:
Florida offers an extremely generous exemption for a homestead property. Unlike other states, Florida allows for an unlimited amount of equity from your main home or auxiliary properties to be covered under the Homestead exemption barring that your property is in larger than half an acre in the city or over 160 acres in rural communities.
In order to qualify for the exemption under the Homestead law you need to wait at least 1215 days before your last bankruptcy filing to claim the same protection. Your Homestead exemption is limited in this regard under a federal law.
Property exemptions in the state of Florida:
You can exempt personal property up to $1000 on furniture, electronics, art and more. You can bump these numbers up to $4000 if you will not be using the Homestead exemption.
Any savings towards education, hurricane or health are exempt.
Any prescribed health aide costs are exempt.
Prepaid savings accounts for medical or health saving account deposits are exempt.
Refunds and tax credits are exempt.
Prearranged Florida funeral costs or contract consumer protection trust fund arrangements are exempt.
Partnership under property is also considered exempt from bankruptcy.
Your Florida motor vehicle exemption totals up to $1000 in motor vehicle equity. If you’re filing for bankruptcy jointly as a married couple, this number will double.
Wage exemption in Florida:
Wages for the header earner in any family are exempt up to $750 per week. This exemption applies to current unpaid wages and any wages that were deposited into a bank account within a six-month period before filing for bankruptcy. Pension payments needed for support and payments that were received up to three months before a bankruptcy are also considered exempt.
Public benefit exemptions are also available for Social Security benefits, workers compensation, crime victims compensation, veterans benefits, reemployment assistance and more.
These represent only some of the most common exemptions that are used under Florida bankruptcy law. It is highly important to speak to a bankruptcy attorney if you’re considering the option of declaring exemptions under Florida statutes. Understanding more about your rights and working to manage exemptions accordingly is important and may require legal counsel. Speaking to an experienced Florida bankruptcy attorney will make sure that you can protect your assets and go about the process of bankruptcy in Florida legally. Maintaining your quality of life is an essential element of filing for bankruptcy. With the exemptions available in Florida, you can work with your creditors while maintaining the assets you have worked hard for.
Contact our staff today should you have any questions about the process of filing for bankruptcy in Florida. We can make the process of filing easier on you and your family!