Bankruptcy exemptions are the Federal and/or State laws which permit you to protect certain property in a Bankruptcy case. A Chapter 7 Bankruptcy case is technically a liquidation of property to pay creditors.
The Chapter 7 Trustee, an individual appointed by the Court, sells any unprotected property and pays creditors with the proceeds. Exemptions also matter in a Chapter 13 Bankruptcy case. The amount of a Chapter 13 plan payment may be affected by unprotected property.
Florida has opted out of Federal exemptions. As a result, we must use Florida exemptions. The following are some of Florida’s common Bankruptcy exemptions:
Homestead – unlimited amount of equity subject to a few limitations. The property cannot exceed ½ acre within a municipality or 160 acres outside a municipality. The property was acquired more than 1215 prior to filing.
Motor vehicle – up to $1,000.00.
Personal Property – up to $1,000.00.
Wildcard – up to $4,000.00. The Wildcard exemption is only available when the Homestead exemption is not used.
Clearly, anyone considering Bankruptcy should discuss their property and the available exemptions with an experienced Bankruptcy attorney.
