With Bankruptcy Exemptions, You Can Keep Most, If Not All, Of Your Assets

Many people delay filing for bankruptcy protection because they are afraid they will lose all of their possessions. In fact, most people who file bankruptcy do not lose any of their property, either because the property is exempt under Florida or federal law, or because it is not valuable enough to take.

I am William Strawcutter. In my bankruptcy practice, I help individuals and businesses throughout Orlando and Florida preserve their assets and their dignity by filing bankruptcy. I offer a free initial consultation to discuss your financial situation. One thing we will discuss is whether you are likely to lose any of your property by filing bankruptcy.

What Does it Mean When Property is Exempt?

In a Chapter 7 bankruptcy, the trustee appointed to oversee your case can liquidate, or sell, any non-exempt property to pay your creditors. In a Chapter 13 bankruptcy, you are generally required to pay your unsecured creditors at least the value of your non-exempt assets less certain deductions. Exempt property is property that you are allowed to keep and which the bankruptcy trustee cannot take to pay your debts. There are different exemptions under federal bankruptcy law and Florida law. When you file bankruptcy, you will be allowed to choose either the Florida exemptions or the federal bankruptcy exemptions. As your lawyer, I will advise you on which exemptions will provide the most protection.

Exemptions Under Florida Law

In Chapter 13 bankruptcy, you keep your property, including your home. In return, you repay creditors (some in full, some in part) through your repayment plan over three or five years.

The homestead exemption plays a role in Chapter 13 bankruptcy because your unsecured creditors must receive at least what they would have gotten if you had filed for Chapter 7 bankruptcy. What they would have gotten in Chapter 7 is dictated by the applicable exemptions.

In Florida, since your entire home is exempt, your unsecured creditors would not get any equity in Chapter 7. This factors into your monthly payment — which will be lower than if you had a big chunk of nonexempt equity in your home.

Claiming the Homestead Exemption

There are a few requirements to claim that unlimited homestead exemption. You can use the unlimited exemption only if:

1. The property is your primary residence.
2. You’ve owned a home in Florida for at least 40 months.
3. The property does not exceed

Free Consultation With a Bankruptcy Attorney

To discuss the nature of your assets and whether they will be exempt in bankruptcy with an experienced and compassionate lawyer, call (407) 268-6844 or fill out the contact form on this Web site to schedule you free initial consultation. My office is conveniently located near downtown Orlando and is accessible by I-4. I also have meeting locations in Winter Park, Lake Mary and Sand Lake areas to best serve my clients’ needs.