Can I keep any of my property if I file for Bankruptcy?

(NOTE: Florida has established a long history of exempt personal property law and you should consult a bankruptcy attorney in your state if you do not live in Florida as all states have developed law in this area that may not be consistent with Florida law).

This is one of the most common questions that I am asked during any consultation for bankruptcy. What you get to keep is called in the law exempt property and is typically referred to as having an exemption in that property. That is that the property is exempt from garnishment, levy and the like.

Starting with the basics, your primary residence (i.e. your homestead) is a protected asset, and can have total protection if it has been your residence for the past 3.5 years. If you have lived at the residence for less than 3.5 years and the residence has more than $139,000.00 worth of equity then you should consult an experienced bankruptcy attorney.

Note, there is not exemption for non-homestead property.

As far as personal property there are two roads you can take. The first would be if you claim an interest in homestead property then you have an entitlement to $1,000.00 in exempt personal property (cash, bank accounts, clothing, personal articles, furiture, furishings, tools, etc.). If you do not claim a homestead interest, that is if you rent or you are in the process of surrendering your homestead residence then you can then retain $4,000.00 in personal property.

As to your vehicles, each debtor is entitled to claim an exemption for one vehicle up to $1,000.00 in equity. This can become more complicated if the property is jointly owed or if the equity in the vehicle exceeds $1,000.00. You may then have the opportunity to claim the property exempt by utilizing some of your unused portion of your personal property exemption or exempting the property by utilizing the Florida common law exemption of tenants by the entireties. (Exemption planning can become complicated and it is always wise to consult with an experienced bankruptcy attorney to chart out your exemptions so that you are allowed to keep the maximum under the law).

To be continued....