What Are Florida's Bankruptcy Exemptions?

Why Are Florida Bankruptcy Exemptions Important in a Chapter 7 Bankruptcy? 

Exemptions are laws that apply during a Chapter 7 bankruptcy case. They were put in place to make sure you can protect property you own from being sold to repay your creditors during bankruptcy.

When you file bankruptcy, you must claim exemptions to protect the things you own. Some people get worried about losing essential items or important family heirlooms. Rest assured that in the majority of Chapter 7 cases, filers don’t lose any property.

If you are feeling overwhelmed and just want help with your Chapter 7 case, take Upsolve’s screener to see if you’re eligible to use our free filing too. Upsolve has helped over 13,000 people get rid of more than $600 million of debt through Chapter 7 bankruptcy.

Can You Use the Federal Bankruptcy Exemptions When You File Bankruptcy in Florida?

No. If you’ve been a resident of Florida for at least two years, you need to use the state’s exemptions. Luckily, in many cases, the Florida state exemptions are more generous than the federal bankruptcy exemptions. You are also entitled to use the federal non-bankruptcy exemptions, which may help you protect certain money benefits.

If you haven’t been in Florida for at least two years when you file your case, you’ll need to figure out which exemptions apply in your case. Read this article to learn more: Can I File For Bankruptcy After Moving To A New State?

What Are Florida’s Bankruptcy Exemptions?

Exemptions cover three broad types of property:

• Real property, like a home or land

• Personal property, like furniture and clothes

• Money benefits, like insurance or retirement accounts

Let’s take a look at the exemption amounts for important items in each category.

Real Property: The Florida Homestead Exemption

Florida is well known for its generous homestead exemption that allows you to protect an unlimited amount of value in your home or any other property that’s covered. 

To do so, you must meet certain requirements:

• The property can’t be larger than a half-acre if it’s in a municipality or 160 acres if it’s outside a municipality. 

• You must have owned the property for 1,215 days before you file your bankruptcy case. 

• Only “natural persons” can use the bankruptcy homestead protection in Florida. This means that properties that are titled in the name of corporations, partnerships, LLCs, or irrevocable trusts aren’t protected under the law.

Note that the Florida Homestead Exemption Statute is the main legislation that determines eligibility for retaining specific assets, like your home. 

Florida’s Wildcard Exemption

If you don’t use the homestead exemption, you can take advantage of Florida’s wildcard exemption. The wildcard exemption allows you to protect up to $4,000 (or double that if you’re married and filing jointly) of whatever personal property you choose. 

You can add this amount to another exemption to increase its overall value. For example, if you have a vehicle that’s worth $5,000, you could add the $4,000 wildcard exemption to the $1,000 motor vehicle exemption to protect the full value of your car.

Source: Fla. Stat. § 222.25(4)

Florida’s Personal Property Exemptions

Personal property is a broad category. It includes household goods, clothing, electronics, jewelry, and other personal items. Florida has an aggregate $1,000 exemption for all personal property, excluding your car. Vehicles have their own exemption.

Remember you can also apply the $4,000 wildcard exemption to protect any of your personal property so long as you haven’t claimed the homestead exemption.

Some other forms of personal property are fully exempt and are listed below.

Source: Fla. Stat. § 222.25(1)

Florida Motor Vehicle Exemption

The Florida motor vehicle exemption is $1,000 (or double this if you’re married and filing jointly). Unlike some of Florida’s other exemptions, the motor vehicle exemption isn’t very generous. Many filers who aren’t using the homestead exemption opt to use the wildcard exemption to cover the rest of the value of their car. The wildcard exemption can help you protect an additional $4,000 of value in your car.

Source: Fla. Stat. § 222.25(2)

Other Personal Property Exemptions in Florida

The following items are fully exempt:

• Education savings, hurricane savings, and health savings

• Prescribed health aids

• Tax refunds and credits

• Medical savings account and health savings account deposits

• Funeral costs — per the Preneed Funeral Contract Consumer Protection Trust Fund in Florida 

• Partnership property

Source: Fla. Stat. Ann. §§ 222.22, 222.25, 222.25(3), 222.22(2), 497.456, 620.153, 620.8307

Money Benefits Exemptions in Florida

Money benefits include pensions, retirement accounts, state and federal benefits, wages, and more. Here’s how specific money benefits can be protected with Florida exemptions.

Pension Exemption

Florida exemptions also protect pensions and retirement funds, such as IRAs, ERISA-qualified pensions and retirement plans, 403(b)s, 401(k)s, and public employee retirement benefits. Also, note that pensions for firefighters and municipal police officers, retirement benefits for county and state officers, and retirement benefits for teachers  are also exempt in the state. The rule of thumb is that any pension that is covered under federal tax exemptions is considered fully exempt under the state law.

When you are in doubt, you should ask your plan administrator or HR office whether or not your plan is an ERISA plan. And if it is, then the retirement plan is protected. If you have any pensions or retirement benefits, talk with a competent bankruptcy attorney in Florida about what you can do to protect these assets.

Source: Fla. Stat. Ann. §§ 121.131, 122.15, 175.241,185.25, 222.21, 238.15

Wage Exemption

If you are the head of a household, Florida law protects up to $750 a week, or 75% of your paycheck, or 30 times the federal minimum wage, whichever is higher. This exemption applies to both paid and unpaid wages, including those transferred to your bank account within the last six months.

Public Benefits, Alimony and Child Support Exemptions

Bankruptcy exemptions in Florida provide protections for a variety of public benefits, such as social security, veterans’ benefits, reemployment assistance, unemployment compensation benefits, workers’ compensation, and crime victims’ benefits.

Child support and alimony are considered exempt in Florida to the extent that these payments are reasonably necessary for the ongoing support of the bankruptcy filer and any of their dependents.

Insurance

The following benefits are fully exempt:

• Death benefits that are payable to a specific beneficiary

• Annuity contract proceeds (not including lottery winnings)

• Life insurance

• Disability and/or illness benefits

• Fraternal benefit society benefits 

Source: Fla. Stat. Ann. § 222.13, 222.14, 222.18, 632.619 

Personal Injury and Lawsuit Exemptions

Damages or compensation (money) for a worker’s injuries or death that happened while working in a dangerous or hazardous occupation are exempt under Fla. Stat. Ann. § 769.05. However, any other monetary amount that you receive from a lawsuit or any pending legal claim will belong to the bankruptcy estate. In order to protect the money, you will have to use another bankruptcy exemption, like the wildcard exemption. 

Keep in mind that if you haven’t resolved the lawsuit when you file for Florida bankruptcy, your bankruptcy trustee has the right to decide whether or not to retain a bankruptcy attorney to proceed with the case in your stead. Your trustee will then decide if it’s better to settle the legal case or proceed to trial.

Need Help Filing Chapter 7 Bankruptcy? 

Bankruptcy exemptions are a very important part of a Chapter 7 filing. They ensure you get to keep your property so you can get a fresh start financially without having to start over with nothing. Filing bankruptcy is a legal process, so it can get complicated. Luckily, you don’t have to do it alone.

You can take our quick screener to see if you’re eligible to use Upsolve’s free filing tool. You can also schedule a free consultation with a bankruptcy attorney if you have specific questions about your case or you simply want some legal help during the process.