Are Public Benefits Exempt in Bankruptcy Cases?
If you are considering a personal bankruptcy filing, and Chapter 7 bankruptcy in particular, you are likely seeking out information about bankruptcy exemptions in Florida. In an individual Chapter 7 bankruptcy case (including bankruptcies filed jointly by married couples), it will be critical to determine which Florida exemptions you are eligible to claim. In a Chapter 7 bankruptcy case, exempting property is what allows you to keep that property such that it is not liquidated by the trustee. In other words, all non-exempt assets will be liquidated so that your creditors can be repaid as fully as possible and so that you can receive a discharge of your eligible debts. While non-exempt assets are liquidated, exempt assets are not liquidated — you get to keep those.
There are many different exemptions under the Florida Statutes, including the availability of limited and specific federal exemptions. In general, you must use Florida state exemptions when you file for bankruptcy in Florida, but Florida exemptions include particular federal exemptions. Those exemptions include various public benefits.
What Are Public Benefits?
The term “public benefits” is used to refer to various forms of government assistance, including benefits paid by local or federal governments. They are often provided for individuals with limited assets and income, but they can also be provided for other reasons, including a person’s age, disability status, military service, and more.
Common types of federal public benefits include Medicaid, Medicare, and Social Security. Public benefits also include veterans’ benefits, as well as Social Security Disability Insurance (SSDI) benefits paid out to individuals who qualify for these disability payments based on their work record and medical record.
Availability of Federal Bankruptcy Exemptions for Public Benefits in Florida
Under Section 222.201 of the Florida Statutes, “an individual debtor under the federal Bankruptcy Reform Act of 1978 may exempt, in addition to any other exemptions allowed under state law, any property listed in subsection (d)(1) of section 522 of that act.” This language points to specific federal bankruptcy exemptions for a variety of public benefits and more. Those federal exemptions include the following types of public benefits:
- Social Security benefits;
- Unemployment compensation;
- Local public assistance benefits;
- Veterans’ benefits;
- Disability or illness benefits;
- Unemployment benefits; and
- Disability payments made in the support of a dependent of the debtor.
Florida Law Exempts Workers’ Compensation and Crime Victim Compensation Benefits
In addition to the above federal exemptions that can be applied to Florida bankruptcy cases, there are also available exemptions under the Florida Statutes for workers’ compensation and crime victim compensation benefits.
Section 440.22 of the Florida Statutes exempts workers’ compensation benefits from claims of creditors. Section 960.14 likewise exempts benefits paid as crime victim assistance.
Contact Our West Palm Beach Bankruptcy Attorneys Today
For any questions about the applicability of specific bankruptcy exemptions to your Florida bankruptcy case, you should seek advice from an experienced West Palm Beach bankruptcy lawyer at Kelley Kaplan & Eller today. We can answer any questions you have, and we can begin working with you on your bankruptcy filing as soon as you are ready to move forward. Contact us for more information.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.201.html
law.cornell.edu/uscode/text/11/522
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0400-0499/0440/Sections/0440.22.html
