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Bankruptcy: Florida

Filing bankruptcy in Florida provides honest debtors an opportunity to get relief from crippling debt, and at the same time enables creditors to receive some repayments based on the value of the debtor’s property or reliability of earnings.  110,304 bankruptcies were filed in Florida in 2010, ranking Florida 13th in the nation for the number of bankruptcy filings per capita.  75% of Florida’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.

Filing Bankruptcy in Florida

Bankruptcy in Florida is governed by federal law and all bankruptcy cases are initiated in the US Bankruptcy Courts in:

  • Florida Middle District Court: Fort Meyers, Orlando, Jacksonville, Tampa
  • Florida Northern District Court: Gainesville, Panama City, Pensacola, Tallahassee
  • Florida Southern District Court: Ft. Lauderdale, Miami, West Palm Beach

Although federal courts have exclusive jurisdiction over bankruptcy proceedings, Florida law prohibits petitioners from choosing the exemptions listed in the U.S. bankruptcy code, requiring instead that debtors choose from the state exemption list. With the guidance of a bankruptcy attorney Florida petitioners can gain a full understanding of what personal property the state exemptions permit the petitioner to keep in bankruptcy, and what must be sold.

Chapter 7 Bankruptcy, Florida

Chapter 7 bankruptcies in Florida are the most common bankruptcy filing. Chapter 7 is preferable for petitioners who don’t have a significant amount of assets, such as investments and substantial equity in a home. This is because a Bankruptcy Trustee may liquidate personal property that isn’t protected by Florida’s bankruptcy exemptions. Liquidation occurs when the Trustee converts personal assets to cash for distribution to creditors. Florida’s Chapter 7 bankruptcy law allows petitioners to keep some essential property; the exempt assets are strictly off-limits to creditors looking for repayment.

The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.

Florida Bankruptcy Exemptions

Florida’s state laws designate specific property exemptions that allow debtors to keep certain personal property and assets so they can move forward and be productive members of society.  Bankruptcy in Florida permits debtors to choose exemptions from the state list.

Property exemption amounts are subject to change, so it is necessary to consult a Florida bankruptcy attorney before making a decision of this magnitude.  Florida bankruptcy exemptions include:

Florida Homestead Exemption

  • May file homestead declaration
  • Unlimited value: Real or personal property including mobile or modular home, cannot exceed 1/2 acre in municipality or 160 acres elsewhere
  • Spouse or child of deceased owner may claim homestead exemption (Husband and wife may double)

Florida Tenancy by Entirety Exemption

  • Property held as tenancy by the entirety may be exempt against debts owed by only one spouse

Florida Personal Property Exemption

  • $4,000 total: Any personal property in lieu of homestead exemption. This exemption does not apply to a debt owed for child support or spousal support.
  • $1,000 total:  Any personal property to (Husband and wife may double)
  • $1,000 total: Motor vehicle
  • Federal income tax refund or credit
  • Health aids
  • Prepaid college education trust deposits
  • Prepaid hurricane savings account deposits
  • Pre-need funeral contract deposits

Florida Wage Garnishment Exemption

  • Federal government employees’ pension payments needed for support & received 3 months prior
  • 100% of wages for head of family up to $750 per week (paid or unpaid) and deposited into bank account for up to 6 months

Florida Public Benefits Exemption

  • Public assistance and Social Security
  • Workers’ and Unemployment compensation
  • Veterans’ benefits Crime victims’ compensation, unless seeking to discharge debt for treatment of injury incurred during the crime

Florida Insurance Exemption

  • Disability or illness benefits
  • Fraternal benefit society benefits
  • Annuity contract proceeds not including lottery winnings
  • Life insurance cash surrender value
  • Death benefits payable to a specific beneficiary, not the deceased’s estate

Florida Pensions and Retirement Savings Exemption

  • State officers and employees, County officers and employees, Firefighters, Police officers, Teachers
  • ERISA-qualified benefits; all tax-exempt retirement funds including IRAs, Roth IRAs

Florida Miscellaneous Exemption

  • Damages to employees for injuries in hazardous occupations
  • Alimony, child support needed for support

Chapter 13 Bankruptcy, Florida

In 2010, ­25% of debtors petitioned for protection under Chapter 13 bankruptcy laws in Florida.  When a petitioner files Chapter 13 bankruptcy in Florida, a court-appointed Trustee reorganizes the petitioner’s debts and develops a 3-5 year repayment plan, by which creditors are repaid using the debtor’s future earnings.  Chapter 13 petitioners in Florida keep most – or all – of their property.

How to File Bankruptcy in Florida

Eligibility for property exemptions should play a role in deciding whether to file for bankruptcy. The goal is to find a solution that will allow you to keep your major assets and qualify your debts for discharge.  Every case is unique, and a Florida bankruptcy attorney can help debtors review their financial facts and decide whether Chapter 7 or Chapter 13 bankruptcy is the best option in their situation.

Bankruptcy Attorney: Florida

It is the debtor’s duty to know their rights and obligations as bankruptcy petitioners.  A Florida bankruptcy attorney can interpret and simplify the federal laws and state exemptions for those considering bankruptcy protection.  Because personal bankruptcy cases can be incredibly complicated and stressful, the bankruptcy expertise and counsel of a Florida bankruptcy attorney is an asset to your financial freedom.