Chapter 7 bankruptcy is a way for individuals to regain some financial traction and get their affairs back in order. Because Chapter 7 may involve the liquidation of a petitioner’s assets, petitioners often wonder which assets they are permitted to hold on to, such as cash in a savings account. The answer is that Florida has limited Chapter 7 exemptions that protect petitioners’ assets, including savings accounts, but some protections do exist.
If you are contemplating bankruptcy, I can safeguard your rights and provide the guidance and representation you deserve. Call Lewis Roberts, PA, Attorney at Law at (407) 749-0080 to consult with a Florida bankruptcy lawyer who cares.
Chapter 7 Bankruptcy in Florida
Chapter 7 bankruptcy is a way for individuals to get out of crushing debt. Once Chapter 7 is complete, most of petitioner’s unsecured debt will be gone. However, any assets a petitioner possesses must be disclosed to the bankruptcy court. Ultimately, sometimes petitioners’ non-exempt assets are liquidated during Chapter 7 in order to satisfy creditors. There are, however, certain assets that are exempt from liquidation.
Florida Has Limited Chapter 7 Exemptions
Exemption laws determine how much of your savings you can keep. Every state allows bankruptcy petitioners to claim exemptions against liquidation for certain types of property. Florida’s state exemptions, which must be claimed instead of federal exemptions, are quite favorable for homesteads but not for personal property, including cash in savings accounts.
Currently, Florida bankruptcy petitioners may only claim up to $1,000 in personal property in most cases. Personal property includes but is not limited to:
- Cash
- Art
- Electronics
- Tools
- Computers
- Equipment.
In other words, the total amount of exempt personal property in Florida cannot be more than $1,000. If you have $5,000 in the bank when you file for Chapter 7, only $1,000 may be protected. Additionally, any other valuable piece of property you have may be subject to being liquidated.
$1,000 for all forms of personal property is quite small when compared to the amount allowed by other states. New York, for example, provides exemption protection for nearly $12,000 in personal property, $6,000 of which may be in cash in a savings account.
In other words, Florida residents should be aware that filing for Chapter 7 bankruptcy will not allow you to keep very much of your savings account. Note that there is one exception that can increase the amount of savings you may retain.
Bankruptcy Wildcard Exemption
As in many other states, there is a wildcard exemption that allows certain filers to increase the amount of personal property they may exempt during Chapter 7 bankruptcy. However, in Florida, you can take advantage of the wildcard exemption only if you do not use the state’s powerful homestead exemption.
The homestead exemption in Florida is one of the most beneficial exemptions of its type for petitioners. It allows for an unlimited amount of homestead protection in a primary residence. However, many of those who need bankruptcy protections are not homeowners and may not benefit from this exemption. Instead, they get the benefit of the wildcard exemption.
Florida’s wildcard exemption allows an additional $4,000 of personal property exemption during Chapter 7 bankruptcy. If a petitioner does not seek to exempt any other personal property besides cash in a savings account, they could potentially hold on to $4,000 in deposits.
I can thoroughly investigate and review your case and options to achieve the most optimal outcome.
Your Chapter 7 Bankruptcy Petition Requires Cash Disclosures
In a petition for Chapter 7 bankruptcy, petitioners must make an honest and complete disclosure of all of their assets, including cash disclosures. When they do so, the assets listed in the petition become off-limits to creditors throughout the entire duration of the bankruptcy proceedings.
Assets to be listed include all real and personal property, such as:
- All real estate holdings, including land, buildings, and interests owned
- Furniture
- Clothing
- Artwork
- Computers and electronics
- Motor vehicles
- Deposit accounts and financial assets
- Business property.
The final list is submitted to the court on the word of the petitioner. Those who fail to list all required assets and property are at a high risk of receiving a denial or revocation of bankruptcy. Failure to list all assets may also potentially be charged as a crime. The consequences may include fines of up to $250,000 and up to 20 years behind bars.
Special Savings Accounts
Certain special types of savings accounts are exempt from liquidation in Florida. They include:
- Health and medical savings accounts
- College tuition savings accounts strictly for educational purposes
The money in these savings accounts is off limits in bankruptcy proceedings for public policy reasons. The state would rather see the funds in these accounts continue on to their original, important destinations instead of ending up in the hands of creditors.
Protection and Guidance Are Immeasurable
If you are dealing with the prospect of a Chapter 7 bankruptcy, nothing will prepare you for the process like the guidance and counsel of an experienced bankruptcy lawyer. Bankruptcy lawyers fiercely guard their clients’ financial interests at every stage, giving clients peace of mind during a difficult financial time.
Bankruptcy is a complicated journey with many pitfalls as well as benefits for petitioners. Unfortunately, many DIY filers are unaware of the controlling laws and the nuanced interpretations of procedures involved in successful bankruptcy cases. Throughout my years as a bankruptcy attorney in Florida, I have witnessed many times how success in bankruptcy proceedings is dependent upon experience, skill, and the ability to navigate the unique details of each case.
Speak With a Chapter 7 Bankruptcy Lawyer Today
If you are considering filing for Chapter 7 bankruptcy, also strongly consider consulting with an experienced Chapter 7 bankruptcy attorney. Your rights matter and deserve protection.
Contact my office for a consultation and case review. Learn how Lewis Roberts, PA can help safeguard your financial interests and help you build a brighter financial future. Call (407) 749-0080 today.
Attorney Lewis Roberts
The weight of debts that one cannot pay carries financial stress into every waking moment. It is time for this to end. Lewis Roberts, PA, offers solutions to relieve these worries. With over 20 years of experience in helping individuals overcome the burden of debt, bankruptcy attorney Lewis Roberts presents a range of options tailored to each unique situation. Clients can trust his advice on any matter related to debts, as he identifies appropriate options and explains the paths to debt relief clearly and carefully. This ensures that clients make the best decisions for their future. [ Attorney Bio ]
