One of the most common questions that potential bankruptcy filers have is whether they will be able to keep their possessions after bankruptcy. The answer is, “Sometimes.” It depends on a number of factors, but some personal property is considered to be “exempt,” meaning that the owner is able to keep that property after a bankruptcy discharge.
One important consideration for people who are filing for bankruptcy is that in Chapter 7 bankruptcy, a person must have little to no disposable income. In Chapter 13 bankruptcy, however, a repayment plan will be created based on existing income. It is more likely to have to give up some property when filing for Chapter 7.
In either situation, it helps to retain the assistance of an experienced bankruptcy attorney. It also helps to understand some details about which items of property a person filing for bankruptcy will be able to keep.
Federal Exemptions for Personal Property in Florida Bankruptcy
Both federal and state bankruptcy exemptions are designed to protect specific property. People in the state of Florida are not allowed to select federal bankruptcy exemptions. Instead, Floridians must use the state’s bankruptcy exemptions.
Not everyone who lives in Florida is able to use bankruptcy exemptions, either. Instead, to be able to select Florida bankruptcy exemptions, a person must have lived in the state for 730 days (or two years) before filing for bankruptcy.
If a person lived in multiple states before filing for bankruptcy, the bankruptcy exemptions that will be available to him or her are determined by where the individual lived for the majority of the period.
What Types of Personal Exemptions Exist in Florida
Many people find that the state of Florida actually has some advantageous personal property exemptions, which include the following:
- Homestead exemption. If a person has equity in a home, the homestead exemption allows that person to keep the home if he or she files for Chapter 7 bankruptcy in some circumstances. This exemption also sometimes applies in Chapter 13 bankruptcy. One limitation in this area is that the property must not be bigger than half an acre in a municipality or 160 acres in another location.
- Motor vehicle exemption. Florida law allows a person to protect $1,000 in car equity if they are filing as a single person for bankruptcy or $2,000 if a married couple is filing for bankruptcy. To use the motor vehicle exemption, a vehicle must be licensed to operate on Florida roads. Bicycles and mopeds cannot be claimed under this exemption.
- Personal property exemptions. A maximum of $1,000 of personal property is exempt from bankruptcy. This category includes collectibles, electronics, and furniture. If a person does not own any real estate, then he or she receives an additional $4,000 in protected assets.
Speak with an Experienced Bankruptcy
If you have questions or concerns about navigating the bankruptcy process, you should not hesitate to speak with a knowledgeable attorney. Contact the Adam Law Group today to schedule a free initial consultation.