Bankruptcy exemptions protect the debtor’s, the person filing bankruptcy, assets. So think of the exemptions available in your state as a magic invisibility cloak that takes that assets, or a portion of the value of an asset, out of consideration when the trustee is looking to see if there is a payment due under the bankruptcy code to be paid to the debtor’s creditors who will be discharged in the bankruptcy case.
It might make more sense to explain these protections using how the bankruptcy exemptions are used in the different bankruptcy chapters.
Chapter 7
In a chapter 7 bankruptcy case, a liquidation for an individual, a chapter 7 trustee is appointed. This trustee has two jobs: (1) Make sure all the debtor has made truthful and complete disclosures to the debtor’s creditors, trustee, and the federal bankruptcy court; (2) Evaluate the value of the debtor’s assets, confirm the debtor’s entitlement to claimed bankruptcy exemptions, and liquidate any non-protected assets to pay creditors.
Claiming the right exemptions in chapter 7 protects the debtor’s assets from being sold, or otherwise liquidated, to pay creditors. Exemptions also communicate to the chapter 7 trustee what you are claiming is not subject to sale, or liquidation by the trustee. Be careful with exemptions. It is important to have an experienced bankruptcy attorney assist and guide your though exemptions to allow you, as the debtor, to keep the most property possible when going through the bankruptcy process. The chapter 7 trustee represents the interests of the creditor body and will not assist the debtor, or an attorney assisting the debtor not versed in bankruptcy, with choosing the right bankruptcy exemptions.
Chapter 13
A chapter 13 bankruptcy is a payment plan. This a reorganization case for an individual, so there is no liquidation of assets. Instead, the equation of the monetary amount resulting from the value of the debtor’s assets less the available exemptions (non-exempt asset value) is used to find the minimum total payment due to creditors over the life of the payment plan.
Some of the Florida Bankruptcy Exemptions
Exemption Planning
An experienced bankruptcy attorney can guide you through the bankruptcy process and counsel you in the proper Florida bankruptcy exemptions to claim in order to maximize the property you protect from liquidation in a chapter 7 case or avoid an unnecessarily high payment in a chapter 13 payment plan.
| Statute | Exemption | Amount |
| Fla. Const. Art. X, §4(a)(1) | Homestead | Unlimited as long as ½ acre in municipality or 160 outside of municipality |
| Fla. Const. Art. X, §4(a)(2) | Personal Property | $1,000 per debtor which can be applied to vehicles, bank accounts, or other personal property |
| FSA §222.25 | Auto | $1,000.00 per debtor for vehicle titled in debtor’s name |
| Common law | Tenancy by the Entireties (TBE) | Special way married people hold property. |
| FSA §222.25(4) | Enhanced personal property | $4,000.00 per debtor if there is no Homestead or TBE exemption claimed on real property |
| FSA §222.21 | Retirement Accounts, such as IRA, 401K, or403b | 100% |
| FSA §222.11 15 U.S.C. §1673 | Wages | Head of Family: 100% of wages Non-Head of Family: 75% of wages |
| FSA §222.22 | Florida Pre-Paid and 529 Accounts for the benefit of children | 100% |
Contact me for More Information
For more information on Florida’s bankruptcy exemptions or help with a bankruptcy filing, contact me to schedule your free consultation.
