The decision to file for personal bankruptcy in Hernando County is never an easy one. Depending on your circumstances, you could be forced to liquidate certain assets in order to repay your creditors. Almost all of those who come to us here at Day Law preparing to file Chapter 7 bankruptcy share the same question: Will I get to keep my home? If you are contemplating bankruptcy yourself, you can understand their concern. Fortunately, state law does allow you to exempt certain assets from your bankruptcy case.
The most common of these is the homestead exemption. This allows you to exempt the equity you have in your home. Say, for example, that your home is valued at $425,000, and you still owe $350,000 on your mortgage. As long as the state homestead exemption is greater than that $75,000 that you carry in equity, your home is protected. If it were less than that, then the bankruptcy trustee can sell your home to pay off debts. He or she would then have to pay you whatever amount in equity you have above the exemption. If the state’s homestead exemption was $50,000, then you would be entitled to $25,000 from the sale.
Fortunately, Florida has a very generous homestead exemption. Per the state’s statutes, the exemption amount is unlimited provided that you have been a resident of the state for at least 40 years. Even if you have not, the state allows you to claim the federal exemption amount, which is $160,375. There is also an acreage requirement attached to the state’s exemption. You are only allowed to exempt the value of property occupying half an acre of municipal land, or 140 acres elsewhere.
You can learn more about the protections afforded to you during bankruptcy by continuing to explore our site.