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Your Home’s Role in a Bankruptcy


When someone files for bankruptcy, a common concern is whether they will lose their home during the process. While a West Palm Beach bankruptcy attorney can best advise you on your particular situation, our team has outlined the process to help you better understand whether your home is at risk.

Will I lose my home?

Not necessarily. The most common type of bankruptcy, a Chapter 7 bankruptcy, is a liquidation bankruptcy where the filer’s assets are liquidated by the trustee, unless the asset is exempt from liquidation. In Florida, a filer’s homestead is usually protected because it is fully exempt under Florida’s exemption laws. This is known as the homestead exemption. In a Chapter 13 bankruptcy, which is a repayment plan bankruptcy, a filer is not required to turnover his non-exempt assets to the trustee for liquidation so long as the filer pays the value of his non-exempt assets to his creditors during the Chapter 13 case.

Understanding Homestead Exemptions

When someone files for Chapter 7 bankruptcy, the homestead exemption protects the filer’s primary residence under most circumstances. This exemption also plays a role in Chapter 13 filings as well because the equity in the filer’s homestead is not used to calculate how much the filer must pay to his unsecured creditors.

Florida has one of the most generous homestead exemptions in the country. In most cases, there are no limits placed on home values for Florida filers seeking to apply the homestead exemption. As long as your property does not exceed 160 acres (or half an acre if the property is located in a municipality), its full value is usually protected so long as you have owned it for at least 1,215 days prior to filing.

If you have questions about bankruptcy, a West Palm Beach bankruptcy attorney at Kelley Kaplan & Eller is here to help. Call our office today for a consultation.

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