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Florida Bankruptcy Laws
Those who file Chapter 7 bankruptcy can, by law, claim exemptions for certain types and amounts of property. Both federal and state exemption statutes exist; however, Florida allows clients to use only state exemptions, which include:
Homestead |
Unlimited - Equity in a Primary Residence is Completely Exempt. This allows debtors to transfer non-exempt assets toward equity to keep more property. |
Personal Property |
Prepaid hurricane savings accounts, prepaid medical savings accounts; prepaid college education trust accounts; motor vehicles up to $1,000; prescribed health aids; federal income tax credits or refunds; funeral contract deposits; other personal property up to $1,000 total |
Wages |
Head of households, 100% up to $500/wk. of paid or unpaid wages; federal government employee’s pension payments |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; state officers and employees; county officers and employees, firefighters, police; ERISA qualified benefits; teachers |
Public Benefits |
Public assistance; unemployment; veteran’s benefits; Social Security |
Insurance |
Death benefits payable to a specific beneficiary; annuity contract proceeds; life insurance cash surrender value; disability or illness benefits; fraternal benefits |
These exemptions must be listed on the bankruptcy petition. Before it can be filed, however, the debtor must complete credit counseling before the bankruptcy trustee takes charge of the proceedings to liquidate funds for Chapter 7 debtors or create a repayment plan for those filing Chapter 13. Shortly thereafter, the client and their attorney must attend a 341 meeting with their creditors to answer any questions. Finally, if everything is in order, the bankruptcy proceeding is complete and those with their obligations discharged are free from debt. Those filing Chapter 13 have a reorganization plan to enable them to be debt free in the designated period.
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