Determining whether you should declare bankruptcy or not is a difficult decision. Bankruptcy may help you get out of a financial hole, but it can come with downsides, too. Effectively, you are starting your financial life from scratch… which is not as hard to recover as most people think.
If you declare bankruptcy, you will want to preserve as much property as possible to make it easier to recover. Taking advantage of key Florida bankruptcy exemptions will help make the transition to post-bankruptcy life easier.
Strategic Tips for Maximizing Florida Bankruptcy Exemptions
When you declare Chapter 7 bankruptcy in Florida, the courts will wipe out most of your debts in exchange for your surrendering unexempt assets. The proceeds of the sale of your unexempt assets are given to partially compensate your creditors. However, the people who made bankruptcy laws recognize that completely stripping your assets would make it impossible for you to recover. Therefore, the law allows you to claim some generous exemptions. You can keep anything that is considered exempt and still get the full benefits of Chapter 7 bankruptcy.
Homestead Exemption
The most potentially valuable exemption in Florida is the homestead exemption. This lets you keep your home, no matter how much it is worth. There are some limits to this exemption, though. You can’t own more than half an acre if your home is in a municipality or more than 160 acres elsewhere. Also, you must have owned the house for at least 1,215 days (3 years and 3 months) before filing for bankruptcy to receive an unlimited exemption.
Motor Vehicle
You can exempt one vehicle that has a value of up to $5,000 (or $10,000 if you are married). The Kelley Blue Book will typically determine the value of your vehicle.
Retirement Benefits
Any benefits that you have in an IRS tax-exempt retirement account are exempt from being seized in Chapter 7 bankruptcy. This means that you should avoid taking money out of these savings accounts early if you think there is any chance you will file for bankruptcy. Money in them loses this protection as soon as you withdraw it.
Wage Exemption
One of the most important exemptions is the wage exemption. You can protect some or all of your paycheck, depending on how much you earn. This exemption protects 75% of your paycheck or 30 times the federal minimum wage, whichever is higher, to a maximum of $750 per week.
Wild Card Exemption
This exemption exists to help people who can’t claim a homestead exemption. Typically, you can choose up to $1,000 of personal property to exempt (with no limits on what you choose). However, if you don’t claim the homestead exemption, that value increases to $4,000 (or $8,000 if you are married).
Considering Chapter 7 bankruptcy in Florida? Contact my law firm at (407) 749-0080 today to schedule a consultation and learn about your options.
Potential Challenges and How to Address Them
Knowing about potential exemptions isn’t enough to maximize. You also have to know about possible challenges and the proper ways to address them.
Car Value Maximum
As generous as the homestead exemption is, the car exemption is quite limited. Only being able to exempt a car worth $5,000 or less (or $10,000 if you are married) is problematic for many car owners. Even older cars, if undamaged, are probably worth more than $5,000. If you didn’t take the homestead exemption, you can add as much as $4,000 to the value of a car you can keep using the wild card exemption.
The automobile exemption is surprisingly low, especially given how generous the homestead exemption is.
Recent Transfers
You can’t protect your assets by lending them to someone or giving them away. For example, if you recently gave a large gift of money or property to your children, that would probably still be considered an asset you own, and it would be included when determining the value of your estate. It is best to avoid giving away anything in the months leading up to bankruptcy. This will make it easier to determine the value of your estate. If the bankruptcy court thinks you are trying to hide assets, it will likely either penalize you or prevent you from declaring bankruptcy.
The Role of a Bankruptcy Attorney
One of the most common questions I receive during the first interview is whether the potential client can represent themself. The answer to that question is yes, but it is not a good idea. You can represent yourself, but you are likely to end up in a worse financial state after the bankruptcy without a lawyer than you would with one representing you (even after attorney’s fees are accounted for). This is because a bankruptcy lawyer acts as your guide throughout the process, doing all of the following:
- Filing all necessary forms completely and on time
- Preserving and submitting all financial documents
- Maintaining a calendar of all meetings and hearings
- Tracking all filing fees and ensuring you pay them on time
- Representing you in front of the assigned bankruptcy trustee and ensuring the trustee does not take advantage of your situation
Your lawyer will also carefully calculate all possible exemptions and give you options that allow you to determine what property you consider most important to keep. Without the experience of a bankruptcy lawyer, you are likely to miss out on important exemptions and lose assets that you could have kept.
Contact Lewis Roberts, PA, to Maximize Your Florida Chapter 7 Bankruptcy Exemptions
Filing for bankruptcy is a big step. The goal is to reset your finances and start fresh with as many assets as you can legally keep. My law firm is dedicated to helping people like you.
Before starting the bankruptcy process, contact Lewis Roberts, PA, at (407) 749-0080 to schedule a consultation with a lawyer who cares.
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 ]
