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Understanding Florida's Bankruptcy Exemptions


Filing bankruptcy is supposed to give people burdened with debt a financial fresh start. This is impossible if those that file for bankruptcy are not able to support themselves after the case is finalized. That is where exemptions come in. Exempt assets are assets that someone who is filing for bankruptcy can keep. A West Palm beach bankruptcy lawyer can assist you through the process, but understanding which exemptions you may be able to utilize is certainly beneficial.

Florida Only Allows State Exemptions

A few states allow residents to choose between using state or federal exemptions, Florida is not one of them. People filing for bankruptcy as Florida residents can only qualify for state exemptions. The 730/180 day rule is used to determine if a filer can use Florida’s exemptions. A debtor must have resided in the state for 730 days (two years), before filing the bankruptcy case. If they have not, then they must use the exemptions of the state they were domiciled the longest during the 180 days prior to the two years before filing. Just because someone is currently living in Florida and will not qualify for Florida’s exemptions does not mean they have to move out to the state. Filers just have to apply the appropriate state’s exemptions when filling out paperwork.

Exemptions Affect Chapter 7 And 13 Bankruptcy

Chapter 7 bankruptcy, also called a liquidation bankruptcy, typically requires debtors to give up property which is not deemed exempt to satisfy debts. Even though other bankruptcy cases allow debtors to hold onto property, exemptions are still relevant. Chapter 13 filers get to keep property in exchange for using future income over a three to five-year period to pay off debts. Exemptions are first taken into account to determine how much a debtor must pay to creditors over the payment term.”

List of Florida’s Common Exemptions

  • Homestead Exemption
    • Florida filers can exempt an unlimited amount of value in their home. However, a property located in a city can only be up to half an acre to be exempt and a property located anywhere else must be up to 160 acres.
    • To qualify for Florida’s homestead exemption, the filer must have owned the property for at least 1,215 days prior to filing.
  • Personal Property Exemptions
    • Personal property, which includes furniture, art, electronics, and so on, up to $1,000
    • Education, health, and hurricane savings
    • Prescribed health aids
  • Motor Vehicle Exemption
    • Motor vehicle equity up to $1,000 if filing individually, more if filing jointly.
  • Wage Exemptions
    • Up to $750 per week wages of the head of the family
  • Wildcard Exemption
    • If a filer chooses not to use the homestead exemption, he can claim up to $4,000 of personal property.
  • Pension Exemptions
    • ERISA qualified retirement plans and pensions
    • IRA’s and Roth IRA’s up to $1,171,650
    • Florida Retirement System benefits
    • Firefighter and police pensions
    • Teachers’ retirement benefits
  • Insurance Policy Exemptions
    • Life insurance policy proceeds that are payable to a specific beneficiary
    • Disability income benefits

Though not as common, there are other exemptions which bankruptcy filers can utilize as well. A West Palm Beach bankruptcy lawyer can help you tackle this seemingly overwhelming amount of information and utilize it in a way that best benefits you. Our team of experienced bankruptcy lawyers will help you file the bankruptcy case and apply for the exemptions best suited for your situation. Call us today to find out how our law firm will represent you throughout your journey towards a fresh start to a debt-free life.

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