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West Palm Beach Bankruptcy & Business Attorneys > > Bankruptcy Attorneys > Federal Versus State Bankruptcy Exemptions

Federal Versus State Bankruptcy Exemptions


If you are considering a personal bankruptcy filing in West Palm Beach or elsewhere in South Florida, you may have begun doing some research into bankruptcy exemptions and how they will apply to a Chapter 7 or a Chapter 13 bankruptcy case. Bankruptcy exemptions refer to assets or property that debtors can “exempt” in the bankruptcy process, but this means different things in Chapter 7 and Chapter 13 cases. In a Chapter 7 bankruptcy case, exemptions allow a debtor to keep property — they do not need to turn it over to the trustee for liquidation. In a Chapter 13 bankruptcy case, exemptions allow the debtor to exempt the value of the asset from the amount that the debtor must repay in the repayment plan. To be clear, no assets are liquidated in a Chapter 13 case. If you have been doing research into bankruptcy exemptions, you have likely come across information about both federal and state bankruptcy exemptions.

Do federal or Florida state bankruptcy exemptions apply to your case? You may also be wondering whether you can choose between the exemptions you use, or whether you are required to use state or federal exemptions. In short, residents of Florida who file for bankruptcy in West Palm Beach must use the Florida exemptions, but our West Palm Beach bankruptcy lawyers can explain in more detail.

Florida Bankruptcy Filers Typically Must Use the Florida Bankruptcy Exemptions 

Most debtors who are filing for bankruptcy in Florida should anticipate that they will need to use the Florida bankruptcy exemptions set forth in the Florida Statutes. Some states do allow debtors to choose between the federal and the state bankruptcy exemptions—although even then, the debtor must use one or the other and cannot draw from both—Florida does not allow debtors to choose. Rather, debtors are required to use the state’s exemptions. The Florida bankruptcy exemptions are generous, especially the homestead exemption.

Under Florida law, debtors can exempt a wide range of assets. The homestead exemption allows debtors to exempt all of the equity in their primary residence.

Debtors Who Have Not Lived in Florida for at Least 730 Days Before Filing Must Use Different Exemptions 

While most Florida bankruptcy filers will be required to use the Florida exemptions, the situation changes when the debtor has not lived in Florida for at least 730 days prior to filing for bankruptcy. Florida law allows a debtor to file for bankruptcy in Florida after residing in the state for at least 180 days. However, the Florida exemptions—including the generous homestead exemption—are only available if the debtor has lived in Florida for 730 days or longer.

In cases where the debtor has not lived in the state for 730 days prior to filing, the debtor will need to use the bankruptcy exemptions of the state where they lived most recently. If this is your situation and your previous state of residence allowed debtors to choose between federal and state exemptions, you should find out if you can choose between the two options when filing for bankruptcy in Florida by speaking with a lawyer.

Contact a West Palm Beach Bankruptcy Attorney 

Anyone who is considering bankruptcy in South Florida should learn more about applicable bankruptcy exemptions by getting in touch with one of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller. Do not hesitate to reach out to our firm to discuss your circumstances and to learn more about your options for bankruptcy in West Palm Beach.




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