If you're a debtor filing for bankruptcy and you live in Florida, you'll be using the Florida bankruptcy exemptions to protect your property.
Written by Kristin Turner, Harvard Law Grad.
Updated November 6, 2021
The Florida bankruptcy exemptions help you keep certain property when you file. Unlike some other states, Florida requires you to use the state exemptions. You don’t have the option to claim the federal bankruptcy exemptions.
How Do Exemptions Work?
When you file for Chapter 7 bankruptcy, one of the biggest questions is whether you'll be able to keep your property.
That depends on which property exemptions you can claim. These laws are called exemptions because they “exempt” — or “excuse” — certain property from being taken. In most cases, exemptions protect most day-to-day items that you own, unless you have expensive property like a house or a car.
Certain exemptions protect entire categories of property like retirements accounts, regardless of value. Other exemptions only protect specific property like a vehicle up to a certain value.
Every state has its own set of property exemptions. And some states also allow you choose between their exemptions and a set of federal bankruptcy exemptions. When they do, they will generally let you to choose the system that is the best fit for you.
Although some states allow you to use the federal bankruptcy exemptions, others do not. Florida does not recognize the federal exemptions.
This means that you don’t have the option to use the federal bankruptcy exemptions. You can only use the Florida bankruptcy exemptions and the federal nonbankruptcy exemptions. More on those later.
This article will help you understand some of the ways Florida’s bankruptcy exemptions work and the things to keep in mind when filing in Florida.
First things first. . .
The Residency Requirement
Before settling on the Florida bankruptcy exemptions, it’s important to be sure that you meet the residency requirements.
You are required to have lived in Florida for at least the past 2 years (730 days before filing) to use that state’s exemptions.
What if you haven’t lived in Florida for the past 2 years? Then, you use the exemptions from the state you resided in for the majority of the 6 month period prior to 2 years ago.
For example, I am filing for bankruptcy in New York today where I live. But until I moved to New York last year, I lived in Vermont for my entire life. When I file for bankruptcy, I need to use Vermont exemptions.
Now that you’ve figured out which state exemptions apply to you, let’s discuss how they might compare to the federal exemptions.
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If you own a home, Florida’s Homestead Exemption is generous.
This Florida bankruptcy exemption covers real property such as family homes, co-ops, mobile homes, burial plots, etc. Florida’s homestead exemption is important because it lets you keep your house.
Other states usually limit how much equity you can have in the house. So, you can only protect up to a certain value. Not so in Florida. As long as you meet the requirements below, you can protect your home using Florida's homestead exemption no matter how much it's worth.
You can use the Florida bankruptcy exemption for homestead if :
You've owned the property for the last 1,215 days prior to filing (~ a little under 3 ½ years) or longer.
Property size can’t exceed ½ an acre (in the city) - or - 160 acres (farther out).
Couples: This exemption can be doubled for spouses that are filing together.
Don't own a house, but have a lot of stuff?
If you don’t own a home, the wildcard exemption helps you keep more property.
If you don’t need the homestead exemption, Florida bankruptcy exemptions allow you to increase the amount of personal property you can protect. Normally you can protect $1,000. But, if you don’t own a home, you can use the wildcard exemption to protect up to $4,000.
This becomes important if you have items that don’t quite fit into certain categories. Or, if the value of some of your property is over the amount the court lets you protect.
So, how does the wildcard exemption work exactly?
Maybe you realize that you want to protect more than $1,000 of personal property. Things like extra books, TVs, clothes, etc. If this is the case, you can use the personal property exemption for $1,000 worth of stuff and then list the wildcard exemption for the rest of the items from $1,001 - $4,000 in value.
Maybe your car has $2,200 in equity and you’re frustrated because the Motor Vehicle Exemption only lets you protect up to $1,000. If you’re not using the homestead exemption, you can use the wildcard exemption to protect the other $1,200 difference!
If you’re not using the homestead exemption, Florida’s wildcard bankruptcy exemption will help you keep up to $4,000 in property.
Florida Accepts Federal Nonbankruptcy Exemptions
Although you are limited to Florida’s bankruptcy exemptions, there are certain instances where you can claim other federal exemptions that aren’t in the Bankruptcy Code. These are called the federal nonbankruptcy exemptions.
You can use the federal nonbankruptcy exemptions if you belong to a specific group of people or work in a particular profession. These exemptions can be applied if you have special circumstances with:
Death or disability benefits, or
Some of the professions it applies to are:
Military service members
Railroad Workers and
Individuals who receive Social Security
It’s important to know whether these special cases apply to you. If you’re eligible, the federal nonbankruptcy exemptions can help you protect property that otherwise wouldn’t be protected under Florida’s bankruptcy exemptions.
What Do the Florida Bankruptcy Exemptions Cover?
This section highlights some of the most common Florida Bankruptcy Exemptions.
Florida’s Homestead Exemption - Amount: Unlimited, if you’ve owned the house for long enough.
What It Covers: The Florida bankruptcy exemption for homestead can help you protect your home, as long as you meet the requirements above.
Motor Vehicles - Amount: up to $1,000 (in equity).
What It Covers: This Florida bankruptcy exemption protects vehicles with equity up $1,000. If you have more, the car may be sold. But, remember if you aren’t using the homestead exemption and want to protect a vehicle, you can use the wildcard exemption to protect up to $4,000 of personal property.
Personal Property - Amount: $1,000, but will go up to $4,000 if you aren’t using the homestead exemption.
What It Covers: The Florida bankruptcy exemption for personal property covers most of your day-to-day items. This likely includes items like:
Household Items, including clothing, appliances, household goods, and electronics
Savings, including Education savings, health savings, and hurricane savings
Tax Credits and Refunds
Wages - Amount: Up to $750, if you’re the head of household.
What It Covers: The Florida bankruptcy wage exemption covers wages earned by the head of the family up to $750 per week, or the greater of 75% or 30 times the federal minimum wage. Wages include unpaid wages and wages deposited in a bank account during the last six months. Also included are wages earned by a person other than the head of the family up to 75% or 30 times the federal minimum wage, or whichever is greater.
Pensions and Retirement Accounts - Amount: Generally unlimited.
What It Covers: This Florida bankruptcy exemption covers money you’ve put aside for later. Also exempt are federal government employees’ pension payments used for support and received up to three months before the bankruptcy filing.
There you have it!
When you’re filing for Chapter 7 bankruptcy, Florida doesn't give you the option to use the federal bankruptcy exemptions. Assuming you meet the residency requirements, you are required to use the Florida bankruptcy exemption. When thinking about how the Florida bankruptcy exemptions can work for you, there are a few other things to keep in mind.
Florida’s homestead exemption is very generous. This is important to consider if you are a homeowner who is concerned about having to give up your house. The exemption is unlimited if your house is less than a certain size and you’ve owned it for a while.
Florida’s wildcard exemption can help you keep more stuff. This is important to consider if you don’t own a home but would like to protect more than $1,000 of personal property.
When you’re filing for Chapter 7 bankruptcy, the Florida bankruptcy exemptions can help you keep most of the property that you own.
Chapter 7 bankruptcy is a powerful social safety net. By erasing your debts and using the property exemptions to protect your stuff, you'll be well on your way to a fresh start.