Tag: homestead exemption

Bankruptcy Law, Consumer Bankruptcy

What Assets Can Creditors Seize in Bankruptcy?

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Bankruptcy filers often fear losing everything they own when going through a Chapter 7 or Chapter 13 bankruptcy case. You may think that filing for bankruptcy means you have to give up your home, your car, and other important assets.  This is simply not true. Laws are in place to help protect you, while also providing creditors with a portion of debt repayment.

All nonexempt assets may be used to repay your creditors in a Chapter7 bankruptcy. These include:

  • Vehicles
  • Land
  • Houses
  • Investment Properties
  • Items of value, like jewelry artwork.

However, many Chapter 7 cases are no-asset cases, meaning the debtor gives up no possessions. This happens for two reasons. First, you can allot for basic assets, called exemptions that are necessary for day-to-day living.  For example, the homestead exemption that protects your primary residence. Your vehicle that you need to get to and from work. Personal items and household goods, tools of the trade (i.e. – items you own and use to make a living) are all protected.

The U.S. Bankruptcy Code and Florida bankruptcy laws protect a great deal of a consumer’s property, if used appropriately. The State of Florida has some of the most generous bankruptcy exemptions in the country, but these exemptions only apply to individuals who meet certain residency requirements. For these exemptions to apply, the consumer must have lived in the state for at least two years before filing. Otherwise, federal exemptions apply.

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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.

Bankruptcy Filings, Bankruptcy Law, Consumer Bankruptcy

Protecting Your Assets During Bankruptcy

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People often fear losing everything they own when filing for personal bankruptcy. The good news is the U.S. Bankruptcy Code and Florida bankruptcy laws protect a great deal of a consumer’s assets and property, if used appropriately.

The State of Florida has some of the most generous bankruptcy exemptions in the country. For these exemptions to apply, the consumer must have lived in the state for at least two years before filing. Otherwise, federal exemptions apply.

How bankruptcy exemptions apply depends on the type of bankruptcy case being filed. In a Chapter 7 case, the bankruptcy trustee sells the filer’s nonexempt property, using the proceeds to pay off qualified debts and discharging the remaining debts at the end of the case.

In some cases, if you are not able to exempt an asset fully, the trustee may abandon it because the value is not significantly more than the exemption amount.  Keep in mind, it is expensive to conduct a sale for an asset, and it is only worth selling the asset if there is money to pay back your creditors. Usually, goods and clothing are exempt unless they are worth a significant amount of money. In certain states, like Florida, there is an unlimited homestead exemption, which allows you to keep your home in its entirety.

Here is a list of the most common bankruptcy exemptions in Florida.

Homestead Exemption

The homestead exemption allows the filer to keep equity he or she has in the home. In Florida, the amount that is allowed to be exempted is unlimited, meaning the entire value of the house is protected. The filer can keep his or her home after the bankruptcy, so long as he or she can keep up on mortgage payments and can pay off any past due payments. Also, to use the unlimited exemption offered by Florida bankruptcy law, the consumer must have owned the home for at least 1,215 days prior to filing, which comes out to roughly three years and four months.

Wage Exemption

Money the filer earns through his or her paycheck can also be exempted up to a certain amount. The law allows wages of the head of household to be fully exempt up to $750 per week. This exemption applies to both paid and unpaid wages. Any wages deposited into the bank account for up to six months prior to filing can also be protected. Other members of the household can protect up to 75 percent (75%) of their wages or 30 times the federal minimum wage, whichever is higher.

Personal Property Exemptions

Personal property can also be protected to a certain amount. Florida’s bankruptcy exemptions protect up to $1,000 in personal property or $4,000 in personal property if the filer does not use the homestead exemption. This exemption covers art, electronics, jewelry, and furniture. Money in a health savings account and education savings account is also protected, as are prescribed home health aides.

Wildcard Exemption

If the filer does not use the homestead exemption, he or she can protect other property via the wildcard exemption. This exemption can be used on up to $4,000 of personal property or $8,000 if the consumer files his or her taxes jointly with his or her spouse. The wildcard exemption can also be used towards the consumer’s home if he or she owes more than the house is worth, to protect that amount of value in the residence.

Motor Vehicle Exemption

The law allows the filer to retain a certain amount of equity in the car he or she drives. Florida allows the filer to exempt up to $1,000 of the equity he or she has in a car, if the filer has any equity at all in the vehicle.

Retirement Savings & Pension Exemptions

Florida bankruptcy law will also protect certain types of retirement plans and pensions, including the following:

  • ERISA-qualified retirement plans, including 401(k)’s, 403(b)’s, IRAs, Roth IRAs, money purchase plans, and profit-sharing plans,
  • Public employee retirement benefits,
  • Firefighter and police pensions, and
  • Teachers’ retirement plans.

Insurance and Benefits Exemptions

Florida bankruptcy filers may also protect the following financial assets through bankruptcy exemptions:

  • Proceeds of a life insurance policy that are payable to a specified beneficiary,
  • Disability income benefits,
  • The cash surrender value on a life insurance policy,
  • Fraternal society benefits, and
  • Proceeds from an annuity contract, with the exception of annuities set up for lottery winners.

Public Benefits Exemption

Additionally, other benefits the consumer receives may also be exempt including the following:

  • Social Security benefits,
  • Veterans’ benefits,
  • Workers’ compensation and/or unemployment benefits,
  • Local public assistance benefits, and
  • Money received as crime victim’s compensation benefits.

Child Support and Alimony Exemptions

Money the consumer receives from an alimony or child support order are exempt from being seized in a bankruptcy so long as they are reasonably necessary the support of the filer and his or her child, in cases of child support.

To ensure that the consumer is properly using these bankruptcy exemptions to protect his or her property, a qualified bankruptcy attorney should always be consulted.

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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.

 

Bankruptcy Law

What Assets are Exempt in Bankruptcy?

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Bankruptcy filers often fear losing everything they own when going through a Chapter 7 or Chapter 13 bankruptcy case. You may think that filing for bankruptcy means you have to give up your home, your car, and other important assets.  This is simply not true. The vast majority of Chapter 7 cases are no-asset cases, meaning the debtor gives up no possessions. This happens for two reasons. First, you can allot for basic assets, called exemptions that are necessary for day-to-day living. What you can exempt varies from state to state, so be sure to discuss exemptions with an experienced bankruptcy attorney. For possessions that are not part of the exemption, creditors likely don’t want them.  Under Chapter 13, you keep all of your assets, but the value of them figures into your repayment plan.

The U.S. Bankruptcy Code and Florida bankruptcy laws protect a great deal of a consumer’s property, if used appropriately.

Bankruptcy Law, Consumer Bankruptcy

How the Homestead Exemption Works in Bankruptcy

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When filing for bankruptcy many clients worry about losing everything they own, including the roof over their heads. However, the U.S. Bankruptcy Code provides bankruptcy exemptions, which allow the filer to protect certain property from being sold off during the course of bankruptcy. The State of Florida offers some of the most generous exemptions in the country for bankruptcy filers, including the homestead exemption.

The homestead exemption allows the filer to protect the equity he or she has in the home in which the filer resides. Florida bankruptcy law allows the filer to claim an exemption on his or her homestead for the full amount of the home, allowing him or her to keep the property during the bankruptcy. The key is, however, the homeowner must have bought and owned the property for at least 1,215 days prior to the bankruptcy filing.

Bankruptcy Law

What is a ‘No Asset’ Chapter 7 Bankruptcy Case?

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In a no-asset Chapter 7 bankruptcy case, the person filing for bankruptcy keeps all of their property because it falls within the exemptions provided under federal law or the law in their state.

With a Chapter 7 liquidation bankruptcy, a filer surrenders their assets to the bankruptcy estate, which uses them to pay off creditors. But in reality, this is only true of non-exempt property. Many of our cases, are in fact, ‘no asset’ cases. Bankruptcy law recognizes that filers need to retain some property so they can survive the process with something on which to build a future after bankruptcy.

Bankruptcy Law

Which Type of Bankruptcy Should I File to Keep My Home?

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One of the biggest fears people have when filing for bankruptcy is losing their home, car, and other important assets. However, with Florida bankruptcy exemptions and depending on the type of bankruptcy being filed, it is possible for consumers to keep their home and other property. It ultimately depends on the filer’s financial circumstances.  

Protecting Home Equity  

How much equity the filer has in his or her home plays a big part in whether he or she can keep it.  Equity plays an important part in both Chapter 7 and Chapter 13 bankruptcies. The equity a person has in his or her home is protected through the state’s homestead exemption, and fortunately for Florida filers, the state’s homestead exemption is quite generous.  

Bankruptcy Law

How Are Assets & Financial Accounts Protected in Bankruptcy?

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When filing for bankruptcy, a common concern individuals have is how bankruptcy will affect their assets. If you are filing for Chapter 7 bankruptcy in Florida, you can use Florida bankruptcy exemptions to protect your property.  In addition, residents are provided unlimited exemptions for homestead, annuities, and the cash surrender value of a life insurance policy.

Florida has one of the most generous homestead exemptions in the country. To use these exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.

Many people are misled to believe that bankruptcy can only make problems worse by causing them to lose their home, vehicle or their ability to ever take out credit, again. This could not be further from the truth.

In fact, those filing for Chapter 7 or Chapter 13 can keep almost everything.  Depending on your specific case, Florida bankruptcy laws allow you to keep the following:

  • Homes
  • Cars
  • Retirement accounts
  • Pensions
  • Wages
  • Personal property
  • Savings
  • Veteran’s or Worker’s Comp. Benefits

Type of Bankruptcy Filed

One deciding factor lies in what type of bankruptcy is being filed. Under a Chapter 7 bankruptcy case, the filer turns over assets that are not otherwise protected under Florida’s bankruptcy exemptions to the court where they are liquidated and used to pay off that person’s creditors. Depending on what falls under Florida bankruptcy exemptions, if the filer has a great deal of assets, this bankruptcy may not be ideal. With a Chapter 13 bankruptcy, the filer’s assets are not liquidated. Instead, an affordable repayment plan is prepared by the court allowing the consumer to pay down his or her debts over three to five years.

Bank Accounts

In a Chapter 7 bankruptcy case, the average filer’s bank accounts are not affected. The exceptions to this, include:

  • When the filer’s bank or credit union account balances exceed the allowed exemption amount;
  • When the filer owes money to the bank or credit union where the funds are deposited;
  • When specific institutions implement policies to freeze the bank accounts.

The protections of the bankruptcy automatic stay, which go into effect immediately upon filing for bankruptcy halt any collection activity, garnishment, and lawsuits against you.

401(k) Accounts

If the filer has money in a 401(k) account through his or her employer, this money is considered safe for the most part. Under Florida bankruptcy law, a filer’s retirement accounts are protected so long as the 401(k) plan is qualified under the Employee Retirement Income Security Act (ERISA). Under 11 U.S.C. Section 522; Fla. Stat. Ann. § 222.21, ERISA qualified retirement plans are fully exempt, including 401(k)’s, 403(b)’s, profit sharing and money purchase plans. However, make sure the account is ERISA protected before making any assumptions.

Traditional or Roth IRA Plans

If the filer has an IRA, including a Roth IRA, this type of plan is treated differently than a 401(k) that is ERISA protected, meaning these accounts are more vulnerable in a Chapter 7 bankruptcy case. Further, any funds that are withdrawn from a retirement account are not considered protected in a Chapter 7 bankruptcy case and are considered fair game for creditors.

Other Retirement or Pension Benefits

Other financial accounts are protected under Florida bankruptcy law, including public employee retirement benefits, municipal police pensions, and firefighter pensions. Teacher retirement pensions, as well as state and county retirement benefits, are similarly protected under Florida bankruptcy exemptions.

Annuity Income

If the filer receives money through an annuity, the rules are a little different. If the annuity was funded through an ERISA-protected IRA or other qualifying account, the filer should be able to exempt up to $1,362,800 of its value, up until 2022 when it is subject to change. If the annuity is also tied to a condition of illness, disability or length of service, the money from the annuity may also be exempt. Because annuities tend to be a little more complicated, it is recommended you consult with a bankruptcy attorney regarding protecting annuity funds.

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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.

Related Resource: https://www.nolo.com/legal-encyclopedia/florida-bankruptcy-exemptions-property-assets-bankruptcy.html

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Understanding the Bankruptcy Process in Florida

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Making the decision to file for bankruptcy is never an easy one. The steps taken during a bankruptcy case vary depending on the type of person or entity filing for bankruptcy. Once you decide to file for bankruptcy, it is important that you avoid mistakes that could impact your case or jeopardize your debts from being discharged.

Business filers are limited normally to a Chapter 11 bankruptcy, unless the business is a sole proprietorship. In this situation, the business may be able to proceed with a Chapter 7 or Chapter 13 bankruptcy. If the filer is an individual, depending on qualifications, he or she may be able to do either a Chapter 7 or Chapter 13 bankruptcy.

To qualify for a Chapter 7 bankruptcy case in Florida, the debtor needs to pass the means test. The means test takes into account your income, expenses and family size to determine whether you have enough disposable income to repay your debts. If the debtor does not pass the means test, the next option is a Chapter 13 bankruptcy, which is also known as a repayment or reorganization bankruptcy. In Chapter 13, the debtor works with the bankruptcy trustee on a three-to-five-year-long repayment plan whereby the debtor’s debts are negotiated down and consolidated into one single monthly payment. The debtor will normally get to keep all of his or her assets in this type of bankruptcy.

Many people fear that filing for bankruptcy will result in them losing everything they own. Do not believe this myth.  Many Chapter 7 cases are “no-asset” cases, which means that the debtor gives up no possessions due to the allotted bankruptcy exemptions.  Florida has one of the most generous homestead exemptions in the country. To use Florida’s exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.

The state also allows the filer to exempt personal property up to $1,000, education savings and health savings, tax credits and refunds, and up to $1,000 in motor vehicle equity if the filers are married and filing jointly. Additionally, Florida allows for wages of the head of family to be exempt for up to $750 weekly or the greater of 75 percent or 30 times the minimum wage. Florida exemptions also cover different types of pensions and retirement funds, as well as annuities and insurance policies.

If a debtor passes the means test and is able to file a Chapter 7 bankruptcy case, the next question is whether the filer’s debt is dischargeable. For the most part, bankruptcy involves debt that is unsecured and not connected to collateral, such as medical bills or consumer credit card debt. Other debt, such as child support payments, tax debt and spousal support are not dischargeable. If the filer’s debt is mainly unsecured, Chapter 7 bankruptcy can be the better option for him or her to discharge the debt. If the filer’s debt is connected to another asset that the filer wishes to keep, a Chapter 13 filing may be the better option.

It helps to have the assistance of an experienced bankruptcy attorney to guide you through the process. A bankruptcy attorney can review the debtor’s situation, advise him or her on the best route to take with respect to bankruptcy and can ensure that all paperwork is completed correctly to avoid any unnecessary delays.

Please click here for more information.

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.

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

What Happens to Your Home When Filing for Bankruptcy?

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When a person files for bankruptcy, a common concern is whether he or she will be able to keep their home. If you are filing for Chapter 7 bankruptcy in Florida, you can use Florida bankruptcy exemptions to protect your property. Residents are provided unlimited exemptions for homestead, annuities, and the cash surrender value of a life insurance policy.

Whether or not a person who is filing bankruptcy under Chapter 7 can keep their home depends on how much equity they have in the home, as well as what state he or she is filing in. Every state has a different homestead exemption level, which sets the amount of home equity an individual may exempt from the assets being sold to satisfy creditors under Chapter 7. As long as the equity in the home is less than the amount allowed by state law in his or her state, the person filing for bankruptcy may keep their home.

Florida has one of the most generous homestead exemptions in the country. To use Florida’s exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.  Here are some of the most common Florida bankruptcy exemptions.

If you have any questions on the topic of bankruptcy exemptions or are in a 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.

Related Resources: http://info.legalzoom.com/happens-home-one-files-bankruptcy-24028.html