What are the most common bankruptcy exemptions?
On behalf of Bankruptcy Law Firm of Clare Casas on Wednesday, September 30, 2015.
Even if you file for bankruptcy, you may still be able to protect some of your property and assets. Under Florida law, certain property may be exempt from bankruptcy. In other words, you get to keep this property even if you go through with the bankruptcy process.
Bankruptcy exemptions exist under both Chapter 7 and Chapter 13 bankruptcy. Under Chapter 7 bankruptcy, which is also known as liquidation bankruptcy, exempt property cannot be sold to pay your debts. Under Chapter 13 bankruptcy, which requires a repayment plan, exempt property also cannot be sold to pay off your debt. However, the value of the exempt property is taken into account when figuring out how much you will need to pay under the repayment plan.
Bankruptcy law recognizes that taking everything from a person can be devastating. Consequently, exemptions are a very valuable tool for bankruptcy filers. They allow you to shield certain property from creditors. This property can help you get back on your feet after your bankruptcy case is over.
In general, bankruptcy exemptions cover property that is necessary for living and working. One of the most common exemptions is your home, which is referred to as the “homestead” under Florida law. Florida law has a very generous homestead exemption. It allows you to exempt the entire value of your home or land, provided that you meet certain requirements.
Other common examples of exempt property in Florida include:
- Personal property worth up to $1,000;
- Up to $1,000 of equity in a motor vehicle;
- Wages and earnings of up to $750 per week;
- Certain savings accounts, such as education, health, and hurricane savings accounts;
- Life insurance policies;
- Public benefits, such as unemployment benefits, workers’ compensation, and social security benefits;
- Certain types of pensions and retirement funds; and
- Alimony and child support
This list covers many of the common bankruptcy exemptions, but there are more. A complete version of Florida’s bankruptcy exemption law is available online.
If you are filing for bankruptcy and want to claim some exemptions, you should speak with an experienced bankruptcy attorney. Filing for bankruptcy is a complicated process, and it is very important that you follow all of the steps correctly.