Florida residents who are facing bankruptcy likely have concerns about what property is considered to be exempt from asset forfeiture. Exempt property is able to be retained by the debtor after the bankruptcy is discharged.
There are exemption limits to equity involving the property. In other words, if you have a vehicle with a $7,000 value but a loan of $6,000, the equity value will be only $1,000. Remaining current on the payments and staying within the equity limits may allow ownership of the property in question to survive a bankruptcy. When the equity is more than the exemption, the bankruptcy trustee can liquidate the asset and distribute the money to creditors. Cases resolved in this way may result in debtors receiving a cash payment in the value of the exemption.
Under most circumstances, bankruptcies allow both spouses to claim full exemptions. Even when property is deemed non-exempt, debtors may sometimes retain it by paying the trustee its value.
Florida debtors may use both state exemptions and those available to them at the federal level as well.
Some exemptions allowed under Florida law include the following:
— Death benefits, if they are made payable to a specific beneficiary and not the estate of the deceased.
— Benefits from fraternal societies if they were received prior to Oct. 1, 1996.
— Illness or disability benefits.
— Child support and alimony.
— Cash surrender value of life insurance.
— Damages to workers for injuries sustained in hazardous occupations.
Other exemptions apply as well. In order to get a clear picture of what is and isn’t allowed as an exemption in a Florida personal bankruptcy proceeding, consult a legal professional for advice.
Source: Florida Bankruptcy Law, “Florida Bankruptcy Exemptions” accessed Jan. 23, 2015