If you're considering Chapter 7, the fear of losing everything you own is probably the biggest reason you haven't picked up the phone yet. That fear is common, and it comes from a misunderstanding of how bankruptcy works.
Florida law protects a long list of property from your creditors, and most people who file Chapter 7 keep their home, their car, their retirement savings, and their paycheck.
If you want a clear answer about what you'd keep before you file, call (321) 320-6088 or contact our team online for a free consultation.
What Does "Exempt Property" Mean?
Bankruptcy exemptions are the categories of property that Florida and federal law shield from your creditors, even after you file. That means a trustee can't sell your exempt property to pay your debts. Florida lets you use its own exemption list instead of the federal one, and that list covers most of what people worry about losing.
How Much of Your Home Can You Protect?
Florida's homestead exemption, found in Article X, Section 4 of the Florida Constitution, protects an unlimited amount of equity in your home. There's no dollar cap, as long as the property sits on a half-acre or less inside a city, or up to 160 acres outside one.
However, you must have owned the home for at least 1,215 days before you file. If you bought your house more recently, a federal cap may apply instead. That's why you should confirm your timeline with an attorney before you file, not after.
What Happens to Your Car and Belongings?
Under Florida Statute § 222.25(1), you can protect up to $5,000 in equity in one motor vehicle. If your car is paid off or close to it, that number likely covers what you own.
Florida also exempts $1,000 in personal property under Florida Statute § 222.25, covering things like furniture, electronics, and clothing. If you don't claim the homestead exemption, that amount grows to $4,000 under section 222.25(4). For renters or people without much home equity, that's often the better path.
Is Your Paycheck Safe?
Florida Statute § 222.11 protects wages for anyone who qualifies as head of household, which means you provide more than half the support for a child or another dependent. If that describes you, your wages are exempt from garnishment, and that protection carries into bankruptcy.
What About Retirement Accounts?
Florida Statute § 222.21 fully protects 401(k)s, pensions, and IRAs, including Roth and SEP accounts. The retirement savings you've built over years of work can generally stay yours.
Do Federal Exemptions Apply in Florida?
Florida opted out of the federal exemption list under 11 U.S.C. § 522(d), so most Florida filers use the state list above instead. A narrow set of federal protections still applies on top of it, including Social Security benefits and certain veterans' and disability benefits.
Note that every dollar figure in this post is subject to change. Congress and the Florida legislature update these amounts regularly, so confirm the current numbers with an attorney before you file.
Filing Chapter 7 isn't about starting over with nothing. It can be the opposite. You keep your home, your car, your retirement account, and your paycheck, and you walk away from debt that's been following you for years.
If you want a clear picture of what you'd keep in your case, call (321) 320-6088 or schedule a free consultation online with our attorneys at Buchalter & Pelphrey. That conversation is the first step toward relief.