Bankruptcy exemptions 101
While it is true that personal bankruptcy is intended to account for substantial amounts of debt, the process is not designed to compromise the financial security and/or personal integrity of filers. As a result, Florida state and federal guidelines regarding bankruptcy exemptions are in place to allow for the reasonable comfort and independence of people that file for Chapter 7 bankruptcy.
Chapter 7 bankruptcy differs from other forms in the way that it involves the liquidation of assets to eliminate personal debt. As a result, many kinds of personal property are subject to bankruptcy proceedings. Findlaw explains, however, that bankruptcy law policies regarding exemptions protect several types of assets. It is worth noting that bankruptcy exemption guidelines in the state of Florida do vary from those in other states. For instance, the Florida Bar Association notes that there is no cap on the value of the state’s Homestead exemption as long as the property meets other requirements.
Generally speaking, many forms of personal property are exempt from being included in bankruptcy. Items such as home appliances, furniture, clothing and even jewelry often fall under the category of exempt property. However, limits may apply to the amount and value of such exemptions. Similarly, a personal vehicle may be protected from Chapter 7 as well. The value of the federal automobile exemption is limited to $3,225, but that amount can also vary.
Personal bankruptcy filers should keep in mind that many other types of property and assets do not meet exemption requirements. Personal collections, for instance, are subject to bankruptcy proceedings, as well as personal savings and second homes.