What are Florida’s Bankruptcy Exemptions?
There are many misconceptions about filing bankruptcy in Florida. Of all of them, one of the biggest is that those who file will lose everything they own. This is not true and in fact, many people who file bankruptcy do not lose any property at all. Within the Bankruptcy Code, Congress provided for federal bankruptcy exemptions that allow debtors to shield certain property from being seized and sold to repay their debts. Additionally, each state also outlines certain exemptions they provide for residents.
So, what are the bankruptcy exemptions in Florida? Below, our Florida bankruptcy lawyer explains further.
What are Bankruptcy Exemptions?
When filing bankruptcy, your property becomes part of the bankruptcy estate. Some of this property may be sold so the proceeds can be distributed to the creditors you still owe, reducing your overall debt. Bankruptcy exemptions, though, can protect certain types of property and ensure it is not seized and sold. In a Chapter 13 bankruptcy, exemptions are used to reduce the overall amount you must repay to unsecured creditors by exempting the equity in the property.
When claiming exemptions, you must include them in your bankruptcy filing. You can do this by listing each exemption separately on Schedule C of your bankruptcy forms. If a mistake is made, an amendment can correct it in the future. However, the bankruptcy trustee can also object to exemptions if they believe you were trying to commit fraud. This is one reason it is so important to work with a Florida bankruptcy lawyer when filing.
It is important to note that to benefit from Florida’s exemptions, you must have been a Florida resident for a minimum of 730 days before filing bankruptcy. If you do not meet this requirement, your state of residency during the 180 days before the two-year period will determine the exemptions that are applicable in your case.
What are the Bankruptcy Exemptions in Florida?
Florida is known for having some of the most generous bankruptcy exceptions in the country. They include:
- $1,000 in personal property
- $1,000 for motor vehicle
- 100 percent of the equity in the homestead
- $4,000 in personal property if the homestead exemption is not used
- 401(k) plan
- 403(b) plan
- Alimony
- Annuities
- Cash surrender value of life insurance policies
- Disability benefits and income
- Professionally prescribed health aids
- Pension payment
- Health savings account
- Hurricane savings account
- Local public assistance benefit
- IRA
- Pre-paid college fund
- For some workers, retirement benefits
- Social Security benefits
- Head of family wages
- Workers’ compensation benefits
The above are just a few of the bankruptcy exemptions available in Florida. It is critical to work with a Florida bankruptcy lawyer who can advise on the exemptions available in your case and how to properly claim them.
Our Bankruptcy Lawyer in Florida Can Help You File
Exemptions are an important part of bankruptcy, regardless of the type you are filing. At Nowack & Olson, PLLC, our Florida bankruptcy lawyer can advise on the exemptions available in your case and ensure you file properly so you have the best opportunity for a favorable outcome. Contact us to schedule a consultation and to learn more about how we can help with your case.
Sources:
flsenate.gov/Laws/Statutes/2017/Chapter222
flsb.uscourts.gov/local-rule/exemptions
