You may be able to leverage bankruptcy exemptions to protect family heirlooms during bankruptcy, but the extent of what can be protected will depend on the specifics of your case.
If you file for Chapter 7 bankruptcy, the liquidation process puts most of your valuable possessions at risk of seizure. If any of your family heirlooms happen to be valuable, such as jewelry or furniture, these may be seized by the bankruptcy trustee and sold off to satisfy your debt to creditors.
Keep reading to learn more about bankruptcy exemptions in Florida and how they can be used to protect family heirlooms.
Florida’s Homestead Exemption
If you consider the home you live in as one of your family heirlooms, there’s some good news. One of the most significant protections under Florida law is the homestead exemption. This exemption allows individuals to protect an unlimited amount of equity in their primary residence, provided the property does not exceed half an acre within a municipality or 160 acres outside of a municipality.
While this does not directly protect individual family heirlooms inside of your home, it can help you protect your family’s real estate and provide financial relief that can make it easier to manage other assets.
Personal Property Exemption
Florida’s personal property exemption allows bankruptcy filers to protect up to $1,000 worth of personal property. If you don’t leverage the homestead exemption, then this amount increases to $4,000 under the wildcard exemption.
Personal property includes items like furniture, appliances, clothing, and, importantly, family heirlooms. Evaluating the worth of heirlooms and ensuring they fall within these exemption limits is a critical step in protecting them.
Can I Gift Heirlooms to Protect Them?
Gifting family heirlooms to relatives or friends before filing for bankruptcy can be a way to protect these items, but you must be very careful in doing so.
Giving away property within two years before filing for bankruptcy can result in scrutiny against your bankruptcy petition, which itself can result in your case getting dismissed without a discharge. You can also be charged with bankruptcy fraud if there’s sufficient evidence that you willfully attempted to avoid liquidation by giving away property.
Contact Us for Legal Assistance
Buchalter & Pelphrey can provide the legal advice and services you need to help you protect precious family heirlooms. When an item is too important to lose, we may be able to help you leverage bankruptcy exemptions to protect it. Rest assured that our experienced attorneys understand the law well and can help you safeguard what matters most to you during bankruptcy.
For more information, contact Buchalter & Pelphrey today to request a consultation.