Bankruptcy requires that you give up some of your property to make a fresh start, but you may be able to protect certain assets from creditors. Fort Lauderdale bankruptcy lawyers at Anidjar & Levine can provide the guidance you need to shield your assets if you decide to file for bankruptcy. Our attorneys offer seasoned counseling in these issues and can represent you in court proceedings. Contact us to learn more about what assets you can protect in bankruptcy.Protecting Assets
You can wipe the slate clean of debt through bankruptcy, but you may lose some of your assets in the process. In bankruptcy, creditors are paid through either a liquidation of your assets (Chapter 7) or a reorganization of your debt (Chapter 13). The law recognizes that you cannot make a new start without basic necessary possessions, and it allows you to exempt certain assets. This means that you can protect some property from creditors.
States can use the federal exemptions, but many have their own sets of exemptions. If you are a Florida resident, you must use the state’s exemptions. They include:
- An unlimited homestead exemption. Florida’s homestead exemption has no value limit. Residents can protect the equity they have in their home from creditors. You must occupy the home, and it cannot be more than half an acre if it is in a municipality, or 160 acres if it is outside a municipality.
- Up to $750 in wages for the head of the household.
- Up to $1,000 in personal property, or $4,000 if you claim no homestead exemption.
- Up to $1,000 for a single motor vehicle.
- Prepaid hurricane savings, medical savings, or college trust accounts.
- Disability benefits and public benefits, including social security and workers’ compensation.
To take advantage of these exemptions, you must have lived in Florida for at least 730 days, or two years, prior to filing your case. If you do not satisfy the residency requirement, you may have to use another state’s bankruptcy exemptions or the federal exemptions.How Exemptions Affect Chapter 7
A bankruptcy trustee will liquidate, or sell, your assets to pay your creditors in Chapter 7 bankruptcy, but you can protect exempt property. For example, you can exempt up to $1,000 in a single vehicle. If your car is worth $3,000, the bankruptcy trustee in your case may sell your car, pay you the amount of the exemption, deduct any costs related to the sale, and then distribute the remainder to your creditors.
You may, however, use other Florida exemptions to protect your vehicle. For example, you can claim up to $4,000 in personal property if you do not claim a homestead exemption. This means you can use the exemption to protect your car from being sold.How Exemptions Affect Chapter 13
Exemptions determine how much you have to pay your creditors under a Chapter 13 repayment plan. In Chapter 13, your debt is reorganized and you pay your creditors under the terms of a repayment plan. The plan usually lasts three or five years. You make monthly payments to a trustee, who in turn pays your creditors.
Your monthly payments are based on your disposable income, but Florida exemptions also play a crucial role. You must pay priority debts, such as alimony, and secured debts if you wish to keep the property attached to the debt, such as mortgage payments and any arrears on your home. For unsecured debt, you must pay at least what you would have paid your creditors had you filed for Chapter 7. If you have property worth $5,000, for example, and Florida does not exempt it, you must pay your creditors at least $5,000 as part of your repayment plan.Hollywood Lawyers Ready to Discuss Your Situation
The Hollywood attorneys at Anidjar & Levine offer exceptional legal representation in bankruptcy matters. We have represented numerous clients in their bankruptcy proceedings throughout Florida. We can discuss what assets you may be able to protect, and whether filing for Chapter 7 or Chapter 13 is an appropriate option for you. Call our office at (800) 747-FREE, or you can complete our Contact Us form to arrange a free initial consultation.