Many people mistakenly believe that once you declare bankruptcy, you are left with nothing. This is not true. In fact, Florida law categorically classifies a class of assets that are “exempt” from the effects of a Chapter 7 bankruptcy filing.
Homestead Exemptions
Pursuant to Article X, Section 4 of the Florida Constitution, your homestead is excluded property and not accessible if you or a loved one files for bankruptcy. This exemption is allowed for properties that have been owned for at least 1,215 days prior to the bankruptcy filing. It is applicable equally to all Florida residents, provided they have been domiciled in Florida for at least 730 days prior to filing of the bankruptcy petition.
Starting from April 2007, a limit of $125,000 has been increased to an exemption of $137,000 of equity if the home property was bought within the last 40 months. A few courts have also held that in case of a married couple, two homestead exemptions may be jointly claimed, amounting to an aggregate protection total of $274,000. Property held under the applicable state tenancy laws may however be exempt against debts owed by a single spouse only. Death benefits payable to any beneficiary other than the deceased’s estate are also exempt under Florida homestead exemption.
Statutory Exemptions
Chapter 222 of the Florida Statutes, titled “Method Of Setting Apart Homestead And Exemptions,” incorporates several other classifications of exempt property, including, but not limited to, pensions and retirement savings, 401K plans, tax deferred retirement plans, Social Security payments, life insurance policies, disability income, IRAs, health savings plans, college investment plans (529 plans included) and natural disaster savings accounts. Wages earned by the head of a family are fully exempt up to $750 per week, applicable to both paid and unpaid wages and wages deposited in a bank account during the last six months. Annuity contract proceeds are also exempt under this clause, except for lottery winnings.
Automobile Exemption
Florida law provides an exemption of $1,000 of equity in the form of an automobile exemption. Married couples who are joint owners of a motor vehicle may file for an exemption worth $2,000.
Miscellaneous Personal Property Exemption
A bankruptcy petitioner may claim exemptions up to $4,000 of personal property if they do not use the homestead exemption (commonly referred to as the Florida Wildcard Exemption under Florida Statute 222.25). For joint debtors this amount doubles up to $8,000. Each debtor is also permitted to file for an additional exemption of $1,000 ($2,000 for joint filings) of all other individual property including furniture, materials, tools, and evaluated cash at hand.
Contact an Experienced Bankruptcy Law Firm Today
Hoffman, Larin & Agnetti, P.A. offers free, confidential consultations for all Florida bankruptcy-related issues. Let our team of experienced Florida bankruptcy lawyers evaluate the specific facts of your case and make recommendations that address your individual issues. Convenient payment plans to meet your budget are available. We have offices conveniently located in Miami, Fort Lauderdale, Islamorada and Key West. You may contact us 24 hours a day, seven days a week. We look forward to helping you.
