Understanding Florida Bankruptcy Exemptions
Bankruptcy exemptions are legal provisions that allow filers to keep certain property during bankruptcy. Exempt property cannot be sold off or liquidated to pay off creditors. Exemptions can protect things like a debtor’s home, car, household goods, wages, and retirement accounts, among others. In the United States of America, the federal bankruptcy law allows every state to use either the Federal list of exemptions or the state’s list of exemptions. However, Florida uses its own list of exemptions and does not allow people to use the federal list. Luckily, in many cases, Florida’s bankruptcy exemptions are more generous than the federal ones. In fact, the Sunshine State is known for having some of the most debtor-friendly exemptions in the country.
How Do Florida Bankruptcy Exemptions Work?
Regardless of the type of bankruptcy you file, you can protect your exempt property. However, every bankruptcy chapter handles nonexempt property differently. For example, in Chapter 7 bankruptcy, the trustee sells nonexempt property and uses the proceeds to repay creditors. On the other hand, in Chapter 13 bankruptcy, you keep all your property and assets, but you must repay the full value of nonexempt property.
It is also crucial to note that spouses can double the exemption amount for jointly-owned property, except for the homestead exemption. Also, while you cannot use federal exemptions, you can use exemptions from the federal non-bankruptcy exemption list.
The Exemptions Florida Residents Are Eligible for
The following are some of the exemptions available to protect property and assets during a Florida bankruptcy proceeding;
- Homestead Exemption
You can exempt an unlimited amount of equity in your home if the property is a maximum of half an acre in a municipality or 160 acres elsewhere. However, you must have owned the property for at least 1,215 days before filing for bankruptcy.
- Personal Property Exemptions
Under Florida bankruptcy law, the following are some categories of property that are considered exempt;
- Up to $1,000 personal property
- Health savings
- Education savings
- Illness benefits
- Tax credits and refunds
- Motor Vehicle Exemption
Up to $1,000 in motor vehicle equity can be exempted, and the amount increases in cases of spouses filing jointly.
- Wage Exemption
Wages for the head of family are fully exempt, up to $750 per week, or 75% or 30 times the federal minimum wage, whichever is greater. Wages for other people are exempted up to 75% or 30 times the federal minimum wage, whichever is greater.
- Pension and Retirement Fund Exemptions
Pension and retirement funds that are exempt under Florida bankruptcy law include the following;
- Tax-exempt retirement accounts
- Firefighter pensions
- Public employee retirement benefits
- Municipal police pensions
- State and County officer and employee retirement system benefits
- Wildcard Exemption
For people who don’t use the homestead exemption, this exemption allows them to protect up to $4,000 of personal property.
The following are other exemptions Florida residents are eligible for;
- Veteran’s benefits
- Workers’ compensation and unemployment compensation benefits
- Alimony
- Proceeds of life insurance policies payable to a particular beneficiary
- Disability income benefits
When Can a Person Use Florida’s Bankruptcy Exemptions?
For a person to be eligible to use Florida’s bankruptcy exemptions, they must have lived in the state for two years before filing for bankruptcy.
Contact Our Deerfield Beach Bankruptcy Lawyer
If you are considering bankruptcy, contact our Deerfield Beach bankruptcy lawyer at the Law Office of Adam I. Skolnik to schedule a consultation.
