Protecting Your Assets in a Chapter 7 Bankruptcy

There are a wide range of myths and misconceptions about how Chapter 7 bankruptcy works, and many people who are struggling with debt try to avoid filing for bankruptcy because they have heard that they will have to give up all of their property if they want to file and have debts discharged. It is absolutely critical to understand that this is a myth about liquidation bankruptcy. Nobody who files for Chapter 7 bankruptcy as an individual consumer or in a joint filing with a spouse will ever have to give up all of their assets because of the existence of bankruptcy exemptions. There are both federal and state bankruptcy exemptions, but Florida is a state that requires filers to apply exemptions that exist under state law (rather than choosing between federal or state exemptions).

The good news is that Florida has many different kinds of bankruptcy exemptions that can allow debtors to protect various assets in a Chapter 7 case. What kinds of assets can you protect with Florida’s bankruptcy exemptions? Our St. Petersburg bankruptcy attorneys can tell you more.

Protecting Your Home 

Florida has a homestead exemption that is, quite possibly, the most generous homestead exemption in the country. Homestead exemptions allow debtors to protect equity in their homes when they are filing for bankruptcy. As long as you have owned your home for at least 1,215 days prior to filing for bankruptcy, and your home is not bigger than 0.5 acres (within a municipality) or 160 acres (outside a municipality), you can protect all of the equity in your home.

To be clear, Florida allows debtors filing for Chapter 7 bankruptcy to protect all of the equity in their home, which means that you may be able to stay in the house you own if it is completely paid off or nearly paid off.

Protecting Your Personal, Tangible Property 

Florida also has a wide range of bankruptcy exemptions that allow debtors to protect personal, tangible property. First, if you do not use the homestead exemption, you are eligible for a $4,000 “wildcard” exemption. That wildcard exemption allows you to protect any assets of your choosing up to that amount. Even if you do use the homestead exemption, you will still be able to protect any asset or assets of your choosing valued up to $1,000.

You can also protect up to $1,000 of equity in your car or truck and your home health aids.

Protecting Money: Wages, Retirement Accounts, and Public Benefits 

You can also protect your intangible property — including certain amounts of money — with Florida’s bankruptcy exemptions. Up to $750 per week of your wages are exempt, along with pensions, most retirement accounts, and most public benefits.

Contact a Bankruptcy Lawyer in St. Petersburg, Florida 

If you are considering filing for Chapter 7 bankruptcy, it is essential to work with an experienced St. Petersburg bankruptcy attorney at the Law Offices of Stephen Barszcz. We can help you to learn more about the process of liquidation bankruptcy more generally, and we can go over the details of your case with you so that you can have a clear understanding of which assets you will be able to protect and keep with Florida’s bankruptcy exemptions. Once you are ready to file, we will represent you from the start of your case through to the end with your debt discharge and fresh start. Contact us today to learn more about how we can assist you.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/0222ContentsIndex.html