What Personal Bankruptcy Filers Need to Know About the Florida Personal Property Exemptions

When it comes to personal bankruptcy, understanding exemptions is very important. Whether you’re filing a Chapter 7 or a Chapter 13 bankruptcy, you’ll need to know what you can – and should – claim as an exemption, as well as how to do so. First, let’s take a look at how exemptions impact various types of bankruptcy cases.

The Difference in Impact – Chapter 7 and Chapter 13 Bankruptcy

While exemptions are crucial to both types of personal bankruptcy, how they impact each is unique to that chapter.

In a Chapter 7 bankruptcy, exemptions are designed to protect the equity you have in certain assets from the creditors that might otherwise seize them to recoup costs. In plainer terms, it determines how much and which parts of your property you get to keep.

When filing for Chapter 13 bankruptcy, exemptions play a slightly different role. They determine how much you will be responsible for repaying your creditors. This determination can have major ramifications for your overall bankruptcy plan. When the payment you owe is manageable, your plan is considered confirmable. Otherwise, you may be disqualified from the Chapter 13 bankruptcy process, forcing you to go through another chapter or alternative means to settle your debts.

So, now you see just how important exemptions are to your bankruptcy case. But what are exemptions, really? What qualifies and how are they used to determine these vital factors? Here’s more of what you need to know before filing for bankruptcy:

Federal Exemptions

In many parts of the United States, citizens filing for personal bankruptcy will do so using nationwide guidelines for claiming exemptions. These federal guidelines are designed to help you keep and protect from creditors the items that have sentimental value to you, or which are a major part of your everyday life. That means that you’ll have to make some difficult decisions and prove the worth of some of your items in order to determine what goes and what stays.

Luxury items are almost never exempt. When facing a bankruptcy, the owners of these items – such as boats, luxury cars, etc. – will typically sell these items to pay down some of the debt they are attempting to settle. Likewise, expensive jewelry is not usually exempt. Sentimental pieces like wedding rings and other such valuables are the exceptions, although they are only guarded up to a certain dollar amount of value in most states.

Pets are another thing that many people worry about when it comes to exemptions from bankruptcy. In most cases, this worry is unnecessary. Most pets will not be seized, regardless of their perceived value. However, very pricey animals – such as show dogs, racing horses, etc. – are not usually exempt. Their owners will either have to surrender them or pay their value to creditors during a personal bankruptcy.

Florida Personal Property Exemptions

What you can use as an exemption in your bankruptcy case doesn’t just vary from person to person. It can also vary based on your geographical location. For Floridians and citizens of several other states, federal bankruptcy exemptions are not allowed to be entered into a bankruptcy case. Instead, filers must use the state-approved exemptions. For many, this means Florida personal property exemptions, among others.

The following are Florida personal property exemptions:

• Any personal property valued up to $1,000. This may include electronics, pieces of art, home furnishings, and other items owned by the party filing.
• Property of any value that is prescribed as a health aide.
• Up to $1,000 of equity that is part of the overall value of your motor vehicle.
• Savings accounts that are designated for education, costs associated with healthcare, or hurricane-related savings.
• Money that came from tax refunds or credits.
• Trust funds set up for funeral costs or to benefit loved ones in the event of death.
• Any money that was prepaid into a medical savings account or health savings account.
• Funds provided for child support, spousal support, or other government-mandated support programs.
• Most public assistance benefits, including welfare or food stamps, Medicaid or Medicare benefits, Veteran’s benefits, and social security benefits.
• Reemployment and unemployment benefits and worker’s compensation payouts.
• Crime victims’ benefits or payouts.
• Some insurance policies and annuities.

Also of note are the Florida Homestead Exemption and the Wildcard Exemption. These are exemptions designed to protect more significant assets, such as land or property.

How much value you can claim under the Homestead Exemption is unlimited. The only cap relates to the size of the property being claimed. Within in a municipality, the size limit is half an acre. Outside of a municipal area, the size limit jumps to an impressive 160 acres! The exemption is designed to protect the living space and necessities for everyday life owned by the person filing.

If the Homestead exemption is not claimed, the filer can opt for the Wildcard Exemption instead. This allows for a maximum of $4,000 of property or assets not otherwise claimed to be protected from creditors during a person l bankruptcy.

As you can see, Florida has one of the most generous exemption lists of any state. However, there are some special circumstances that you must meet to qualify for use of the Florida personal property exemptions mentioned above. The most stringent is that you must have resided in Florida for exactly 730 days or longer before the date of your bankruptcy filing. If you had more than one residence, you must be able to prove that your primary residence was in the state of Florida for this length and period of time. Only through adequate, legal residency can you qualify for these exemptions.

If you need more help Florida personal property exemptions, contact the local industry experts at Van Horn Law Group. With extensive knowledge and experience in the field of bankruptcy law, the legal professionals at Van Horn Law Group can not only help you navigate the process of filing for bankruptcy – they can help you emerge better off on the other end.