Health Savings Accounts and Consumer Bankruptcy in Florida
Are you considering filing for consumer bankruptcy (also known as personal bankruptcy) in Florida but concerned about certain savings accounts you have been adding to over a long period of time being liquidated? More specifically, have you been contributing for many years to a health savings account (HSA) and are now concerned that those assets will need to be liquidated if you file for personal bankruptcy? Regardless of whether you are considering a liquidation bankruptcy under Chapter 7 or a reorganization bankruptcy under Chapter 13 or Chapter 11, it is important to know that any funds you have contributed to an HSA will be protected under Florida law and US bankruptcy law.
Our West Palm Beach bankruptcy attorneys can explain in more detail below, and we can begin working with you on your personal bankruptcy filing as soon as you are ready.
No Assets Are Liquidated in Reorganization Bankruptcy
First, you should be aware that none of your assets will be liquidated if you are planning to file for a reorganization bankruptcy under Chapter 13 (or Chapter 11, in some instances). This type of bankruptcy does not involve the liquidation of any assets, including HSAs and other savings accounts you have contributed to recently or in the past.
Instead, with a reorganization bankruptcy, you will create a repayment plan through which you will repay certain creditors (secured and priority creditors) over a period of three to five years. At the end of the terms of the repayment plan, you can be eligible to have nonpriority unsecured debt discharged, and none of your assets will need to be liquidated.
HSAs Are Exempt in Chapter 7 Personal Bankruptcies in Florida
Liquidation of certain assets does occur for individual or married debtors filing for Chapter 7 bankruptcy. However, even in a liquidation bankruptcy, there are many different “exemptions” that allow you to keep certain assets and to protect them from liquidation, including HSAs.
Under Section 222.22(2) of the Florida Statutes, “Moneys paid into or out of, the assets of, and the income of a health savings account or medical savings account . . . are not liable to attachment, levy, garnishment, or legal process in this state in favor of any creditor of or claimant against any account participant, purchaser, owner or contributor, or account beneficiary.”
In other words, any and all assets in an HSA or other type of medical savings account are exempt if you file for Chapter 7 bankruptcy — you can keep all of these assets. This section of the Florida Statutes also applies to other types of savings accounts, which your bankruptcy attorney can discuss with you in more detail.
Contact Our West Palm Beach Bankruptcy Lawyers Today for Help with Your Bankruptcy Case
Health savings accounts or HSAs, along with many other types of savings accounts that Floridians open, do not have to be liquidated if you file for Chapter 7 bankruptcy in South Florida. To find out more about exemptions and your consumer bankruptcy case, get in touch with an experienced West Palm Beach bankruptcy attorney at Kelley Kaplan Delaney & Eller, PLLC today. We can answer any questions you have about personal bankruptcy in Florida, and we can get started on your bankruptcy filing today. Contact us to get started.
Source:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.22.html
