Florida Bankruptcy Exemptions

Florida bankruptcy exemptions determine what property you get to keep when you file for bankruptcy in Florida. The United States Supreme Court confirmed that the purpose of filing bankruptcy is to allow a debtor to work for their future, without having to take on an overwhelming amount of debt. But, how can you continue to work towards improving your financial future when your property is lost? You do not have to file for bankruptcy to lose your property. You can actually protect your property against creditors by filing for bankruptcy relief in Florida.

Protect Property By Using Bankruptcy Exemptions

Your property is automatically included in your bankruptcy estate when you file for Chapter 7 or Chapter 13 cases. However, this does not mean you will lose your property. To protect certain assets from creditors and the court, congress created federal bankruptcy exclusions in the Bankruptcy Code. You can use bankruptcy exemptions to prevent the Chapter 7 trustee from selling your property. Exempting equity from your property can reduce the amount that you have to pay unsecured creditors under a Chapter 13 repayment plan.

To apply for exemptions, however, you must “claim” them in your bankruptcy filing. To claim the exemptions, you must list all the exemptions that you claim along with the property in the schedule. An amendment can correct incorrectly scheduled exemptions or omissions made in error. However, the trustee could object to amended exemptions if he believes that the debtor is committing fraud or trying to hide property. It is important to consult a Florida bankruptcy lawyer who knows how to make the bankruptcy exemptions work for you to ensure your property is protected to the maximum extent allowed by law.

Florida is also one of the states that “opt-out” of federal bankruptcy exemptions. While some states permit debtors the option of choosing between state and federal exemptions, Florida requires that all debtors use Florida bankruptcy exemptions only if they qualify for state exemptions.

Who Can Claim Florida Bankruptcy Exemptions?

To be eligible for the state’s bankruptcy exemptions, debtors must have lived in Florida for 730 consecutive days before filing for bankruptcy. If you don’t meet the residency requirement, the bankruptcy exemptions that you can use in bankruptcy cases will be determined by your residency within the 180-day period preceding the two-year period.

You could file a Florida bankruptcy case, but you may be required to use exemptions from another state. 

Protecting Property With Florida Exemptions

The exemptions for bankruptcy enacted in states differ from the federal exemptions and other exemptions. The homestead exemption is one of the most favorable bankruptcy exemptions for residents of Florida. However, it is often severely limited by other states.

Florida law allows you to exempt equity from your home and another real estate that is eligible for a homestead exemption. Florida’s unlimited homestead exemption has two requirements. The first is that you must be the owner of the property for at least 1,215 days prior to filing your bankruptcy petition. The property must not be larger than 160 acres, or one-half of an acre in a municipality. If these requirements are met, you may be eligible for the unlimited homestead exemption.

Florida bankruptcy exemptions can protect your home and personal property. They also protect retirement accounts and wages. You may be able to use bankruptcy exemptions to protect your property in Chapter 7 and Chapter 13 cases.

Bruner Wright’s Jacksonville bankruptcy lawyers carefully examine each exemption to make sure we claim every exemption that is applicable to your case in order to protect your property. In most cases, people who file for bankruptcy in Florida don’t lose their property.

Bankruptcy Exemptions in Chapter 7

Chapter 7 bankruptcy trustees can sell nonexempt properties to pay unsecured creditors. The bankruptcy exemptions can be used to protect your equity so that the trustee doesn’t sell your property. In other words, you can keep exempt property. Most Chapter 7 cases in Jacksonville FL allow debtors to get rid of all or most of their unsecured loans without losing any property.

Bankruptcy Exemptions in Chapter 13

Chapter 13 cases do not allow the trustee to seize property for the benefit of unsecured creditors. To avoid paying a higher monthly plan payment, bankruptcy exemptions must be used. Any equity that is not exempt from the Chapter 13 plan payment must be added to what is due to unsecured creditors. Non-exempt equity will result in a higher plan payment.

You can preserve your equity and keep your plan payments as low as possible by correctly using bankruptcy exemptions in a Chapter 13 case. An experienced Jacksonville bankruptcy attorney will make sure you fully utilize the exemptions when you file your Chapter 13 petition.

Call Us Now for a Bankruptcy Consultation

Our Florida bankruptcy law firm is available to serve clients throughout Tallahassee to Jacksonville Florida. Schedule a complimentary bankruptcy consultation with an experienced bankruptcy lawyer today. Bruner Wright P.A. can help you find a cost-effective solution to your debts while protecting your assets from creditors and bankruptcy court. Contact us now!