“Won’t I lose everything if I declare bankruptcy?” This is a fairly common question we receive from people who are struggling with their debt but don’t want to consider bankruptcy as an option. As Brevard County bankruptcy attorneys, we understand: nobody wants to lose anything, let alone that which is the most important to you such as your home, your car, or your life savings as you work towards eventual retirement. Fortunately, there are ways you can protect these assets during bankruptcy, which we’ll explain in a little more detail here.
WHAT ARE EXEMPTIONS?
Whether you’re filing for Chapter 7 or Chapter 13 bankruptcy, exemptions will play a huge role. Essentially, the law states you are allowed to declare a certain amount of your assets exempt from liquidation or being given over to the command of a bankruptcy trustee. What you can exempt is determined by the value of the things you wish to declare as exemptions.
Some people choose to use their exemptions for things they depend on for their livelihoods, such as a modest car, professional tools, or electronics that they use as part of their career. Some people choose to use all or part of their exemption to protect a retirement account. Many people who own a home choose to use their exemption to try to avoid being foreclosed on.
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HOW DO EXEMPTIONS WORK?
Exemptions work differently based on what type of bankruptcy you’re declaring and what property you’re exempting. It’s important to note that Florida does not allow residents to use the federal exemptions—you must use those indicated by state law
Here are some common exemptions that many Florida residents choose to take advantage of:
- Personal property: You’re allowed to exempt up to $1,000 in property, including furniture, art, and electronics
- Homestead Exemption: You are allowed to exempt the entire value of your property, so long as the property is your primary residence, not larger than half an acre (or 160 acres outside of any municipalities), and you’ve owned the property for 1,215 days.
- Education savings, health savings, and hurricane savings
- Prescribed health aids, medications, and medical equipment
- Tax credits and refunds - PLEASE REMOVE THIS BULLET POINT
- Motor vehicle equity: you may exempt up to $1,000, and more if you’re married and filing jointly
- Wages: You can exempt either up to $750 per week or the greater of 75% or 30 times the federal minimum wage - PLEASE REMOVE THIS BULLET POINT
- Wildcard: Florida law allows you to claim up to $4,000 of additional personal property as exempt if you don’t take advantage of the homestead exemption
- Pensions: Speak to a lawyer to learn how much of your IRAs, Roth IRAs, and more can be exempted
There are even more exemptions you may be able to utilize as well. It’s important you have a Brevard County bankruptcy attorney on your side to assist you with the careful and meticulous planning needed to maximize your ability to take advantage of these exemptions. Having a skilled attorney on your side can mean the difference between keeping or losing important assets when filing bankruptcy.
Call The Buchalter Law Group today at (321) 320-6088 to speak with a member of our team and get help protecting your assets during the bankruptcy process!