What Property Can You Keep When Filing Bankruptcy in Florida?
Filing bankruptcy does not automatically mean giving up everything you own.
One of the biggest concerns people have before filing bankruptcy is whether they will lose their property. Your home, vehicle, furniture, personal belongings, savings and retirement accounts may represent years of work, so the thought of losing those assets can make bankruptcy seem intimidating.
Filing bankruptcy in Florida does not automatically mean losing everything you own. Florida law provides exemptions and other protections that may allow certain property to be protected from creditors. What you can keep depends on the type and value of the property, the exemptions available to you, any liens against the property and the type of bankruptcy being filed. Florida Senate
Therefore, understanding what may be protected before filing is an important part of the bankruptcy process.
What Are Bankruptcy Exemptions?
Bankruptcy exemptions are laws that allow certain property or interests in property to be protected from creditors.
When an individual files bankruptcy, assets and liabilities must be disclosed. However, property that qualifies for an applicable exemption may be protected. In Chapter 7, nonexempt property can potentially be sold by the trustee for the benefit of creditors, which makes correctly identifying available exemptions particularly important. United States Courts
Florida has its own exemption laws covering several different types of property.
Can You Keep Your House When Filing Bankruptcy In Florida?
In many cases, it may be possible.
Florida provides significant homestead protections for qualifying property. However, whether a particular home is protected can depend on factors including whether the property qualifies as a homestead and the circumstances surrounding the property and bankruptcy filing. Florida law also recognizes exceptions to homestead protection for certain obligations and liens. Florida Senate
For that reason, homeowners should have their individual situation reviewed before assuming either that their house is completely protected or that it must be surrendered.
Can You Keep Your Car When Filing Bankruptcy In Florida?
Florida law currently provides an exemption of up to $5,000 of a debtor’s interest in a single motor vehicle. Florida Senate
However, the value of the vehicle is only part of the equation. Any loan balance, the equity in the vehicle and other available exemptions may affect how the vehicle is treated.
Additionally, an exemption does not eliminate a valid vehicle loan. Therefore, keeping a financed vehicle can involve considerations beyond simply determining whether its equity is exempt.
Can You Keep Your Personal Belongings?
Personal property can include furniture, clothing, electronics, household goods and other belongings.
Florida law provides certain personal-property exemptions. In addition, a debtor who does not claim or receive the benefits of Florida’s homestead exemption may, under the statutory conditions, claim an exemption of up to $4,000 in personal property. Florida Senate
The value of property for bankruptcy purposes can also be important. Therefore, an inventory of assets and their values should be reviewed when determining which exemptions may apply.
What Happens To Money In Your Bank Account?
Money held in checking and savings accounts must be considered when preparing a bankruptcy case.
Whether those funds can be protected can depend on the amount of money, its source and the exemptions that may apply. Florida law separately addresses several types of protected assets and funds, including qualifying wages and certain other assets. Florida Senate
For that reason, bank balances and recent transactions should be reviewed before filing.
Many qualifying retirement accounts receive substantial protection under Florida law.
Florida’s exemption statutes specifically address qualifying pension money and certain tax-exempt retirement funds or accounts. Florida Senate
However, the type of retirement account and how the funds are held can matter. Withdrawing or moving retirement money before bankruptcy can also change the analysis.
Yes.
In Chapter 7 bankruptcy, the bankruptcy trustee can liquidate nonexempt assets for the benefit of creditors. Exempt property may be retained, subject to applicable law and valid liens. United States Courts
In Chapter 13 bankruptcy, the process is different. Rather than using the Chapter 7 liquidation process, an individual proposes a repayment plan. The value and treatment of property can still affect the requirements of that plan. United States Courts
Therefore, the appropriate bankruptcy chapter and available exemptions should be considered together.
Yes.
In Chapter 7 bankruptcy, the bankruptcy trustee can liquidate nonexempt assets for the benefit of creditors. Exempt property may be retained, subject to applicable law and valid liens. United States Courts
In Chapter 13 bankruptcy, the process is different. Rather than using the Chapter 7 liquidation process, an individual proposes a repayment plan. The value and treatment of property can still affect the requirements of that plan. United States Courts
Therefore, the appropriate bankruptcy chapter and available exemptions should be considered together.
Do not assume that transferring property will protect it.
Florida law specifically addresses fraudulent transfers and fraudulent conversions involving assets, and bankruptcy requires disclosure of financial information and property interests. Florida Senate
Selling, giving away or transferring property shortly before filing can create additional issues rather than solve them.
Therefore, significant transfers or changes in ownership should be discussed with a bankruptcy attorney before action is taken.
Understand What You May Be Able To Protect
Filing bankruptcy in Florida does not automatically mean losing your home, car, retirement savings or personal belongings.
Florida law provides exemptions and protections for different types of property. However, what can be protected depends on the property involved, its value, available exemptions, liens and the type of bankruptcy being filed. Florida Senate
At Carratt Law, we help clients review their property and financial situation before filing. That includes looking at homes, vehicles, bank accounts, retirement accounts, personal property, debts and available exemptions so clients can better understand what may be protected before the bankruptcy process begins.
If you are considering bankruptcy in Florida and are concerned about what property you may be able to keep, contact Carratt Law to discuss your options.
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