Knowing and understanding Florida bankruptcy exemptions is essential to determining whether you should file a chapter 7 bankruptcy or a chapter 13 bankruptcy and Jacksonville’s debt relief attorney, Matthew C. Bothwell, Esq. is here to help. When you file for Chapter 7 bankruptcy protection you agree to turn over your non-exempt property to the trustee to sell or liquidate for the benefit of your creditors. Fortunately, the state of Florida will not allow you to be left with absolutely nothing and through the Florida Constitution and §222, Fla. Stat. (2014) you are afforded generous exemptions that allow you to remove certain property from the trustee’s grasp.
The reality is that while Florida bankruptcy exemptions are not perfect, they are very generous and in many cases protect all of your property. Below is a list of Florida bankruptcy exemptions.
Homestead – Your homestead, defined as real or personal property, including mobile or modular home and condominium, not exceeding 1/2 acre in a municipality or 160 acres elsewhere is protected from Chapter 7 liquidation to unlimited value. This exemption protects 100% of the value of your home from the trustee but will not protect it from creditors holding liens such as a mortgage.
Personal Property – Prepaid hurricane savings accounts, prepaid medical savings account deposits, and prepaid college education trust deposits are exempt from liquidation by the trustee. Prescribed health aids, federal income tax credits or refunds, and pre-need funeral contract deposits are also exempt.
Property Credit – There is also a credit for any personal property up to $1,000 of its fair market value which may be doubled if you are filing jointly with your spouse. If you do not claim the Florida homestead exemptions, Florida law allows for a $4,000 compensatory exemption that may be doubled if filing jointly with your spouse. This means that if you and your wife file for bankruptcy and do not claim the homestead exemption you will be able to protect $10,000 of your personal property from the bankruptcy trustee. If you are filing alone and do not claim the homestead exemption you can protect $5,000 of personal property.
One Vehicle – A motor vehicle up to $1,000 ($2,000 if owned jointly by spouses),
Wages – The head of household may claim 100% of earnings up to $500 a week as exempt, which applies to either unpaid or paid wages, or wages deposited in a bank account for up to 6 months. If you are a Federal government employee your pension payments that are needed for support and were received up to 3 months prior to the bankruptcy are exempt.
Pensions – Tax exempt retirement accounts, traditional IRAs and Roth IRAs up to $1,095,000 per person and pensions of state officers and employees, county officers and employees, teacher, firefighters and police officers are also exempt. ERISA – qualified benefits, IRAs and Roth IRAs are likewise beyond the reach of the bankruptcy trustee.
Public Benefits – Public assistance, unemployment compensation, Veterans’ benefits, and social security benefits are also exempt from seizure as are settlements or payments received from workers’ compensation claims. Compensation received by crime victims’ is exempt from liquidation unless you are seeking to discharge a debt for treatment of the crime related injury.
Alimony and Child Support – Alimony and child support needed for support are also exempt from discharge.
Insurance – Death benefits payable to a specific beneficiary, annuity contract proceeds excluding lottery winnings, life insurance cash surrender value, disability or illness benefits and fraternal benefit society benefits are beyond the reach of the trustee. Damages to employees for injuries incurred in hazardous occupations are also beyond the reach of the trustee.
It is very important to understand what Florida bankruptcy exemptions apply to you particular case before filing bankruptcy. If you have questions regarding Florida bankruptcy exemptions or the bankruptcy process please contact Jacksonville’s debt relief lawyer, Matthew C. Bothwell, Esq. I am here to help.