Each State has a specific set of exemptions you use to protect property such as your home, car, and retirement account when filing a Chapter 7 or Chapter 13 bankruptcy case. Exemptions are important because if property is not protected in a Chapter 7 case, then the Bankruptcy Trustee may sell that property. In a Chapter 13 Bankruptcy unprotected property impacts the amount of your plan payments.
Bankruptcy Exemption Domicile Rules
A person uses the bankruptcy exemptions of the State in which he or she was “domiciled” prior to filing the Bankruptcy case. The Bankruptcy Code specifically addresses when a person has been domiciled in a State.
If you have resided in one State for two years prior to filing your bankruptcy case, then you must use that State’s exemptions. If you did not reside in any one State during the two years prior to filing bankruptcy, then you use the exemptions of the State you lived in for the majority of the 180-day period immediately preceding the two-year period. However, some States require that you reside in the State at the time you file the Bankruptcy case. So if you did not reside in one State during the two-year period and cannot claim the exemptions of the State you resided in for the majority of the 180-day period (because you do not currently live in that State), then you may claim Federal exemptions. 11 U.S.C. §522(b)(3).
As you can see, what bankruptcy exemptions apply in a particular case can become very complicated when you have moved within two years of filing your bankruptcy case. It is advisable to seek the assistance of an experienced bankruptcy attorney when filing bankruptcy so that the correct exemptions are used.
Florida Bankruptcy Exemptions
Those that were domiciled in Florida must use Florida bankruptcy exemptions. Florida does not allow you to choose between Florida exemptions and Federal exemptions. The following are common Florida Bankruptcy Exemptions.
Florida Homestead Exemption
Florida’s homestead exemption is considered to be one of the most generous in the country. Under Florida law, you can exempt an unlimited amount of equity in your home as long as the property is not larger than half an acre in a municipality or 160 acres elsewhere. Fla. Const. Art. X, §4(a)(1); Fla. Stat. Ann. §§ 222.01 & 222.02.
If you’ve lived in Florida and are eligible for the state’s exemptions, there is only one limitation on the Florida homestead exemption. You must have owned the property for at least 1,215 days prior to filing the bankruptcy case. If you acquired the home within 1,215 days of filing the bankruptcy case, then your homestead exemption may only protect up to $170,350.00 of equity. 11 U.S.C. §522(p)(1).
Florida Motor Vehicle Exemption
You can exempt up to $1,000 in motor vehicle equity. If you are married and file a joint Bankruptcy case, then you and your spouse have a motor vehicle exemption. Fla. Stat. Ann. § 222.25(1).
Florida Personal Property Exemptions
The following categories of personal property are exempt:
- Personal property up to $1,000. Personal property includes such items as furniture, art, and electronics, and $4,000 if the homestead exemption isn’t used (see the wildcard exemption below). Fla. Const., Art. X, §4(a)(2).
- Education savings, health savings, and hurricane savings. Fla. Stat. Ann. § 222.22.
- Prescribed health aids. Fla. Stat. Ann. § 222.25.
- Prepaid medical savings account and health savings account deposits. Stat. Ann. § 222.22(2).
- Earned Income Credit. Stat. Ann. § 222.25(3).
- Funeral costs per Florida’s Preneed Funeral Contract Consumer Protection Trust Fund. Stat. Ann. § 497.456.
Florida Wage Exemption
The wages of the head of the family are entirely exempt under Florida law. This exemption applies to both paid and unpaid wages as well as any wages deposited in your bank account during the prior 6 months. Fla. Stat. Ann. § 222.11(2)(a).
Florida Wildcard Exemption
If you do not use the homestead exemption, then you may use the wildcard exemption on any personal property. The wildcard exemption is $4,000.00. Fla. Stat. Ann. § 222.25.
Retirement Accounts in Florida
The following retirement accounts are exempt under Florida law:
- ERISA qualified retirement plans and pensions (including 401(k)’s, 403(b)’s, profit sharing and money purchase plans, SEP and SIMPLE IRA’s, and other defined benefit plans) are fully exempt. Fla. Stat. Ann. § 222.21.
- Public employee retirement benefits. Stat. Ann. §§ 121.131, 121.055(6)(e).
- State and County officers and employee’s retirement system benefits. Stat. Ann. § 122.15.
- Firefighter pensions. Stat. Ann. § 175.241.
- Municipal police pensions. Stat. Ann. § 185.25.
- Teachers’ retirement benefits. Stat. Ann. § 238.15.
Alimony and Child Support Exemptions
Florida bankruptcy laws also protect alimony and child support, to the extent reasonably necessary for the support of the debtor (the bankruptcy filer) and any dependent of the debtor, as exempt. Fla. Stat. Ann. § 222.201.