The fear of losing everything is a very real fear for many bankruptcy filers. However, this is one of the most common bankruptcy myths, and can keep individuals who are drowning financially from filing for bankruptcy. One concern many filers have is, what will happen to my property during bankruptcy?
The good news is Florida bankruptcy laws offer generous exemptions which allow individuals to keep various types of property. If an item of property falls under one of these exemptions, this means that the person can keep the property after filing for bankruptcy. Property that does not fall under one of these exemptions is considered nonexempt and can be sold by the bankruptcy trustee and used to pay down qualifying debts.
Most Chapter 7 bankruptcy exemptions have a limit, however, which means that bankruptcy protects certain types of property only up to a certain limit. For example, if the filer has a vehicle that is worth $4,000, and the Florida property exemption for vehicles is $1,000, this means that only $1,000 of equity would be protected under exemptions unless other exemptions are used to protect the remaining equity.
Florida’s property exemptions are broken down by distinct categories of property. One of the most generous of these exemptions is the Florida homestead exemption. Florida allows filers to exempt an unlimited amount of equity in their home so long as the property is not larger than half an acre in a municipality or elsewhere.
To be able to claim the Florida homestead exemption, the filer must have owned the property for at least 1,215 days prior to filing. Otherwise, he or she will need to utilize the federal bankruptcy exemption.
For cars, Florida exemptions allow the filer to exempt up to $1,000 in equity in the vehicle, but this amount does increase if the case is being filed by individuals who are married and filing jointly.
Personal property can be exempted up to $1,000, including electronics, furniture, and art. The amount can be increased to $4,000 if the homestead exemption is not used.
Florida property exemptions also cover education, health savings, and hurricane savings accounts, prescribed health aids, prepaid medical savings account or health savings account deposits, tax credits and refunds, and funeral costs.
Wages are also exempt up to a certain amount under Florida exemptions. Wages for the head of the family can be exempt up to $750 weekly or the greater of 75% or 30 times the federal minimum wage. This exemption amount applies to both paid and unpaid wages, as well as any wages deposited in a bank account during the preceding six months. Wages for anyone else in the household are protected at 75% or 30 times the federal minimum wage, whichever amount is greater.
Please click here to read more.
If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.