Exempt Property in Bankruptcy
One of the key issues in filing bankruptcy is determining what constitutes exempt property in bankruptcy. Exemptions can be found in the state constitution, the state statutes, federal law, and state and federal case law. The following list of property is some of the exempt property in Florida. (Note: If you resided in another state for the two years before filing bankruptcy, our office will have to research the laws of that state before determining what exemptions apply to you).
The most important exempt property in bankruptcy is the homestead exemption. Your homestead is exempt under Article X, Section 4 of the Florida Constitution. This protection is afforded homestead properties situated on one-half acre or less within a municipality and properties up to 160 acres outside a municipality. There is no dollar limitation. The homestead exemption applies to all Florida residents.
Florida residents can protect unlimited equity in his or her homestead provided he or she purchased the residence 40 months or more prior to filing bankruptcy. If you purchased your home within 40 months of filing, you can exempt up to $146,450 of equity. Additionally, if you paid down the principal on your mortgage or added an addition to your home within 40 months of filing, the amount of the money you put in your home or the amount spent for the addition made within 40 months of filing will not be exempt even if you purchased your home more than 40 months ago. (Keep in mind that the 40 month rule applies only to bankruptcy cases; therefore, our office might advise you not to file bankruptcy if you purchased a large home with cash in the last 40 months).
Other Examples of Exempt Property in Bankruptcy
Miscellaneous personal property: If you claim a homestead exemption, you can keep up to $1,000 of equity in your personal property, including furniture, clothes, cash, tools, etc. (If you are married and file jointly, you can keep up to $2,000 in equity). If you do not claim a homestead exemption, you can keep up to $5,000 ($10,000 married filing jointly) of personal property.
Click here for a complete list of exempt property under Florida statutes.
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