Chapter 7 Exemption Limitations in Florida

By David Carnes

You must file for Chapter 7 bankruptcy with a federal court, and federal law generally applies. However, Florida maintains its own set of bankruptcy exemptions -- property that you may keep even after filing for bankruptcy. Although some states allow you to choose between federal and state exemptions, Florida generally requires you to use state law exemptions, if you qualify for them. Limitations apply to most exemptions.

Chapter 7 or Chapter 13

A Chapter 7 bankruptcy is very different than a Chapter 13 bankruptcy. Under Chapter 13, you pay all or most of your debts under favorable repayment terms, and your property is not liquidated. Under Chapter 7, however, all of your property, except property covered by exemptions is liquidated to pay creditors, and you receive a debt discharge. Certain debts, such as recent federal income tax debts, are ineligible for discharge.

The Means Test

You must pass a means test to be eligible for Chapter 7 bankruptcy. You pass this test by showing that you cannot repay your debts. The means test is based on a complex computer algorithm and takes into account your monthly income and expenses. You pass this test by showing that you cannot afford to repay your debts. You are eligible for Chapter 7 bankruptcy without taking the means test, if your debts are primarily non-consumer debts, such as business debts that you personally guaranteed, for example -- or if your income falls below the median for your geographical area.

Get a free, confidential bankruptcy evaluation. Learn More

The Homestead Exemption

To take advantage of Florida's bankruptcy exemptions, including the homestead exemption, you must have lived in Florida for at least 24 consecutive months before filing for bankruptcy, except for property held in tenancy in the entirety. There is no dollar limit on the value of the homestead exemption unless the debtor has not owned the home for at least 40 months prior to filing for bankruptcy. In this case, the limit is $146,450 in equity. An acreage limit applies -- 160 acres for rural property and one-half acre for urban property. .

Earnings and Garnishment

If you are the head of a household, your take home pay of up to $750 per week is also exempt, even if it is not based on personal services or labor. Even disposable earnings above $750 per week cannot be garnished without your written consent. If you are not the head of a household, your wages cannot be garnished by more than that allowed by the federal the Consumer Credit Protection Act, which is the lesser of 25 percent of your take home pay or the amount by which your take home pay exceeds 30 times the federal minimum wage.

Personal Property, Vehicles and Benefits

Under Florida law, "personal property" includes clothing, furniture and cash in financial accounts. The personal property exemption applies to up to $1,000 worth of personal property, or up to $4,000 if you don't claim the homestead exemption. You may also claim an exemption of up to $1,000 of the value of a single vehicle. Social Security benefits, pension plans, retirement accounts, disability benefits, veteran's benefits, unemployment benefits, alimony, child support and similar benefits are completely exempt to the extent that they are necessary to support the debtor and any of the debtor's dependents.

Get a free, confidential bankruptcy evaluation. Learn More
What Assets Are Liquidated in a Chapter 7?


Related articles

How to File Bankruptcy in Washington State

If your debts are beginning to overwhelm you, you may be considering bankruptcy to help you get back in control of your finances. Since bankruptcy is governed by federal law, the actual process for filing bankruptcy is the same in every state, but certain aspects of the process are determined by state law or by each district's bankruptcy court.

Three Options to Protect Your Car in a Bankruptcy

If you're facing Chapter 7 bankruptcy, you may lose your car. However, depending on where you live and your personal circumstances, you may be able to keep your car even if you file Chapter 7. In other instances, filing Chapter 13 may be a better option if you want to keep your car.

Bankruptcy & Exemptions in Michigan

You can relieve a dire financial situation by filing for bankruptcy protection from creditors. The law allows you to petition in a federal court, which will issue an automatic stay barring any further collection action and halting all lawsuits against you. In Chapter 7, a court-appointed trustee seizes non-exempt assets and sells them to repay your creditors. Federal law allows you to exempt (protect) some of your assets, and Michigan has its own schedule of exemptions, as well.


Related articles

What Happens in Bankruptcy If I Own My Home Outright?

If you're considering bankruptcy, you're naturally concerned about what you can keep and what may have to surrender. If ...

What Is Not Exempt Under Chapter Seven Bankruptcy?

When you file for chapter 7 bankruptcy, you put your financial affairs into the hands of a federal court and a ...

Do I Have to Give Up Things That I Own Outright When I File Bankruptcy?

Bankruptcy can be an intimidating process because of the uncertainty and complexity involved in turning over your debts ...

Bankruptcy Exemption Requirements

If your debts are out of control and you have little hope of catching up on the bills, you have the option to file for ...

Browse by category
Ready to Begin? GET STARTED