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What Can I Keep If I File Bankruptcy?

Most people are reluctant to declare bankruptcy for fear of losing their home, their car, or their personal possessions. In reality, you may be able to keep most of your things, depending on the kind of bankruptcy your file for and the specifics of your case.

Homeowners are allowed a $1,000.00 exemption for personal property because they are allowed to claim their homestead exemption.  Married debtors filing jointly double that amount.  Non-homeowners and homeowners who chose to surrender their home are also allowed a $1,000.00 personal property exemption PLUS an additional $4,000.00 wild card exemption that they can apply to any of their personal property to level the playing field thus protecting their property from creditors.  Married debtors filing jointly double that amount.

Chapter 7 Bankruptcy.  Under the terms of Chapter 7 bankruptcy, most of your unsecured debt should be wiped out. However, the court may sell some of your personal items and property in order to pay creditors all or a portion of what you owe them if you exceed your exemptions. In general, non-essential luxury items like LCD TVs, high-end stereo equipment, a boat, expensive clothes or jewelry, or certain kinds of appliances could be sold. Workers' compensation benefits, Social Security disability income, assets from a prepaid college fund, and retirement funds are usually exempt. If you can continue making payments on your car, you will likely be able to keep it.

Chapter 13 Bankruptcy.   Since Chapter 13 involves a restructuring of your debt, it is frequently used to allow you to keep your home, cars, and personal property under its terms. Under Chapter 13, a trustee is appointed by the court after you file. You will be required to repay a percentage of what you owe over a 3 to 5 year period. As such, any debt owed on credit cards or loans will be incorporated into the terms of your repayment plan. The court will not need to sell your property since the debt against it will be paid down according to the terms of your Chapter 13 repayment plan. Additionally, you should be able to keep your home since Florida provides a generous homestead exemption.

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Florida Bankruptcy Services