How do Florida Bankruptcy Exemptions Help Me Keep My Property When I File Bankruptcy?

The United States Supreme Court confirmed the goal of a bankruptcy filing is to give a debtor the opportunity to continue working for the future without the overwhelming burden of debt. Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934) However, how are you supposed to continue working to improve your financial future if you lose your property when you file for bankruptcy relief. Filing bankruptcy does not mean that you lose your property. In fact, one of the benefits of filing for bankruptcy relief in Florida is that you can protect your property from creditors.

Our Daytona bankruptcy lawyers can help you choose the right chapter of bankruptcy for you that eliminates your debts while protecting your property. Call our Florida bankruptcy law firm at (888) 316-2131 to schedule a free bankruptcy consultation with an attorney. It does not cost you anything to discuss your options and learn about the bankruptcy process.

Using Bankruptcy Exemptions to Protect Property

When you file a Chapter 7 or a Chapter 13 case, your property becomes a part of your bankruptcy estate. However, this does not mean that you will lose any of your property. Congress provided federal bankruptcy exemptions within the Bankruptcy Code so that debtors could protect certain property from creditors and the court. By using bankruptcy exemptions, you can prevent your property from being sold by a Chapter 7 trustee. You can also reduce the amount you must pay to unsecured creditors in a Chapter 13 repayment plan by exempting the equity in your property.

However, you must “claim” the exemptions in your bankruptcy filing for them to apply. Claiming the exemptions requires you to list each of the exemptions you claim with the corresponding property on Schedule C of your bankruptcy forms. An amendment may correct improperly scheduled exemptions or omissions that were mistakes. Nevertheless, if the trustee believes the debtor was committing fraud by attempting to hide property, he could object to the amended exemptions. Therefore, it is extremely important to work with an experienced Daytona bankruptcy lawyer who understands how to use bankruptcy exemptions to provide the greatest protection of property afforded by law.

Furthermore, Florida is one of the states that has chosen to “opt out” of federal bankruptcy exemptions. Some states allow debtors to choose between federal exemptions and state exemptions, but Florida requires all debtors to use Florida bankruptcy exemptions only if they are eligible to use the state exemptions.

Who Can Claim Florida Bankruptcy Exemptions?

The Florida bankruptcy exemptions are found in Chapter 222 of Title XV of the 2017 Florida Statutes. Debtors must have been a Florida resident for at least 730 days prior to the bankruptcy filing to be eligible to use the state’s bankruptcy exemptions. If you do not meet the residency requirement, your residency during the 180 days before the two-year period determines the bankruptcy exemptions you must use in your bankruptcy case.

Therefore, you could file a bankruptcy case in Florida, but you could be required to utilize exemptions from another state. The discussion below applies to bankruptcy exemptions used by debtors eligible to claim Florida exemptions. Our Daytona bankruptcy attorney can discuss using exemptions from other states or using federal exemptions in a bankruptcy case during a free consultation.

Protecting Property in Bankruptcy with Florida Exemptions

Bankruptcy exemptions enacted by states vary from federal exemptions and other state exemptions. One of the favorable bankruptcy exemptions available to Florida residents that is often severely restricted by other states is the homestead exemption.

Under Florida laws, you can exempt all the equity in your home or other real estate that qualifies for a homestead exemption. There are two main requirements for the unlimited homestead exemption in Florida. First, you must have owned the property for a minimum of 1,215 days before filing your bankruptcy petition. Second, the property cannot exceed 160 acres or one-half acre in a municipality. If you meet these requirements, you can probably claim the unlimited homestead exemption.

In addition to protecting your home, Florida bankruptcy exemptions protect items of personal property, retirement accounts, and wages. Some of the bankruptcy exemptions you may use to protect your property in a Chapter 7 or Chapter 13 case includes:

• $1,000 for personal property

• $1,000 for a motor vehicle

• $4,000 in personal property if you do not use your homestead exemption

• Disability benefits and income

• Most retirement accounts

• Health savings accounts

• Most government benefits

• Most public benefits

Our Volusia County bankruptcy attorneys carefully review each exemption to ensure we claim all exemptions applicable in your case to protect your property. In most cases, debtors who file bankruptcy in Florida do not lose any property.

Bankruptcy Exemptions in Chapter 7

A Chapter 7 case is also referred to as a liquidation bankruptcy because a Chapter 7 trustee can sell nonexempt property to pay unsecured creditors. You can use the bankruptcy exemptions to protect equity in your property so that the trustee does not sell your property. In other words, you get to keep property that is exempt. In most Chapter 7 cases filed in Volusia County, debtors are able to eliminate all or most of their unsecured debts without losing any of their property.

Bankruptcy Exemptions in Chapter 13

In a Chapter 13 case, the trustee does not seize property to sell for the benefit of unsecured creditors. However, it is important to use bankruptcy exemptions to eliminate the need to pay a higher plan payment each month. When your Chapter 13 plan payment is calculated, any equity in assets that is not exempt must be added to the amount to be paid to unsecured creditors. Therefore, nonexempt equity will increase your plan payment.

However, by utilizing bankruptcy exemptions correctly in a Chapter 13 case, you can protect the equity in your property while keeping your plan payment as low as possible. A Daytona bankruptcy lawyer can help you ensure you utilize exemptions fully when you file your Chapter 13 petition and schedules.

Call Now for a Free Bankruptcy Consultation in Daytona

Our bankruptcy law firm serves clients in Daytona and throughout Volusia County. For your free bankruptcy consultation with a bankruptcy lawyer, call (888) 316-2131. We are here to help you find an affordable solution to your debt problems while protecting your property from creditors and the bankruptcy court.