If you have been following my blog for any length of time, you probably know that there are two types of bankruptcy that are available to individuals namely Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is liquidation bankruptcy where your assets are sold off (liquidated) to pay your creditors whereas Chapter 13 bankruptcy is workers bankruptcy where you utilize a major portion of your salary to pay your creditors under a payment plan lasting 3 to 5 years.
You would be glad to know that under both types of bankruptcies there are exempted assets i.e. assets that are protected from liquidation under Chapter 7 bankruptcy and assets that help you obtain affordable payment plans under Chapter 13. So what are these exempted assets?
There are different types of exemptions and they each provide property protection based on asset value. Some exemptions will protect the entire value of an asset or personal property. There is also what is called a wildcard exemption that can provide additional protection. The types of assets that are exempted will vary according to the state you live in. For example, in Florida the exempted assets include your primary home up to half an acre if your house is in a municipality area and 160 acres if it is located elsewhere. Another type of exempted asset under Florida state law is personal properties up to $1,000 in value. Personal properties can include assets like furniture, art and electronic items.
Florida law also permits you to exempt up to $1,000 worth of your motor vehicle if you are single. This amount increases for married filers applying for joint bankruptcy with their spouse. If you are the head of your household, your wages are exempted up to $750 per week in Florida.
In addition, there are also assets that are exempted under federal law and some states allow you to use both state and federal law exemptions at the same time but not in all states is this the case. For example, Florida does not permit both state and federal law exemptions to be used. These assets cannot be sold under Chapter 7 bankruptcy and under Chapter 13 they will be taken into consideration in determining your monthly payment amount.
For more information on this and other aspects of bankruptcy, call us at (813) 200 4133 for a free consultation.