Unsecured debt doesn’t just eat into your income by requiring that you make payments. It also puts you at risk of legal action by creditors that could mean a garnishment of your wages or a lien against your personal property.
Filing for personal bankruptcy can be a smart move for those with income and assets to protect from creditors. However, in certain forms of bankruptcy, some of your property may be vulnerable to liquidation.
The courts can require that you sell some of your assets in a Chapter 7 filing. Any proceeds from those sales will go to repay your unsecured creditors. Thankfully, Florida allows you to exempt or protect some of your property from liquidation in a Chapter 7 bankruptcy filing.
How much property can you protect in a Florida bankruptcy?
If you have lived in Florida for long enough to qualify for the state exemptions, it will be the size of the parcel of the land on which your home sits that matters for your exemption. Although many states limit the amount of equity, you can protect an unlimited financial amount of equity depending on the size of the property involved.
If you have lived in Florida for at least 40 months, you can potentially protect up to 160 acres of rural property or half an acre within a municipality, provided that the property serves as your homestead or primary residence. In situations where someone has not been in Florida long enough to qualify for this exemption, you can still protect a specific amount of your home equity with your filing.
Those with property often need to take more care during bankruptcy
You can have substantial assets and still have diminished income and a need to protect yourself with a bankruptcy filing. Comparing your current level of home equity for the state exemptions can help you determine whether Chapter 7 is right for you.
The greater the value of your personal property, the more important it will be for you to understand the different chapters of individual bankruptcy and the exemptions available. With the right support, you can maximize the benefits of your discharge while minimizing what property you lose to liquidation.