What Are Bankruptcy Exemptions And How Do They Work?
Anyone who files bankruptcy is allowed to exempt certain property they own, and take steps to hang on to that property even though a bankruptcy case is pending. In order to take advantage of this law, you have to note what property you claim to be exempt. The Bankruptcy Code provides a list of standard exemptions, and so does state law. In some cases the state exemption may be larger, and in others the federal Bankruptcy Code provides for more. In Florida, the state exemptions are used when filing for the protection of bankruptcy, and you are required to have lived in the State for a certain time period prior to claiming the exemptions. For some, this might mean your bankruptcy case must be timed just right when filing.
Common exemptions under Florida law include the following:
- Your primary residence.
- Your car, up to a certain dollar value.
- Clothing and other personal items.
- Wages, up to a certain figure, for the filer with head of the household status.
- Certain types of retirement plans and the balances in those accounts.
- Insurance policy proceeds.
- Child and spousal support payments.
- Interests you have in a business or partnership.
But what does all of this mean? It means that the property defined as an exemption cannot be used to repay debts in your bankruptcy. You are free to keep these assets, subject to any applicable bankruptcy law or rule such as reaffirming the debt. It is important to keep in mind that just because property is exempt, you do not get it free and clear. You are still required to maintain payments for exempt property if you wish for it to remain in your possession. One thing to remember when claiming property as exempt is that the Trustee does have the ability to object to your exemption. You will want to be sure you have claimed only the amount allowed, where an amount is designated, and that you meet the residency requirements for claiming the exemptions. We can help you make these determinations, and help make sure you hang on to what is rightfully yours.
For assistance with bankruptcy issues, call our office today. Call a Plantation, Florida debt relief attorney today for more information.