Am I Eligible for Bankruptcy Exemptions?
If you have some familiarity with bankruptcy processes, you might know that “exemptions” are important in most individual bankruptcy cases. While exemptions are relevant in most personal or consumer filings, they do serve different purposes. In a Chapter 7 bankruptcy case, exemptions are what allow the debtor to retain certain property or assets while other assets (i.e., non-exempt property) are liquidated. In a reorganization bankruptcy case under Chapter 13, for example, exemptions are used to determine the total amount of the debtor’s repayment plan and thus can play a significant role in determining the monthly payments a debtor must make.
Are you eligible for bankruptcy exemptions? Debtors who file for bankruptcy are eligible to claim exemptions in the ways mentioned above, but it will be critical to determine whether you are eligible to claim Florida’s exemptions. Our West Palm Beach bankruptcy lawyers can explain in more detail.
Exemptions Will Apply to Liquidation and Reorganization Cases
Regardless of whether you can claim Florida’s exemptions or will need to claim another state’s exemptions (we will explain more below), you can claim exemptions to retain property in a Chapter 7 case or to lower the amount of your overall repayment plan in a Chapter 13 case, as discussed above.
Determining Your Eligibility for Florida Bankruptcy Exemptions
Generally speaking, in order to be eligible to file for bankruptcy in Florida (or in any other state), the US Bankruptcy Code requires that you have lived in Florida for at least 180 days before you file a bankruptcy petition. Yet it is critical to understand that eligibility to file for bankruptcy in a state does not necessarily mean that the debtor is eligible to claim that particular state’s exemptions.
There are federal exemptions, but most states require debtors to use state exemptions, and Florida is one of those states. In other words, you cannot choose between federal and Florida state exemptions. However, in order to be eligible for Florida’s exemptions, you will need to have been living in Florida for at least 730 days (or two years) prior to filing for bankruptcy.
When You Need to File for Bankruptcy But Are Not Yet Eligible for Florida’s Exemptions
What will happen if you need to file for bankruptcy but have not lived in Florida for 730 days? If you meet the 180-day requirement for filing for bankruptcy in Florida, you will still be eligible for exemptions, but you will use the exemptions in the state where you lived during the majority of the two years before you filed your bankruptcy petition.
Contact Our West Palm Beach Bankruptcy Attorneys
Filing for bankruptcy can be complicated, but an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller can assist you throughout the process. Whether you have questions or concerns about bankruptcy exemptions, or you need more information about other aspects of the bankruptcy process, our firm is here to help. We can discuss your specific circumstances with you today, and we can begin working with you on your bankruptcy filing. Contact us to learn more about our bankruptcy services for individuals and businesses in South Florida.