Florida is one of the most populous states in the country — and it’s also a place that millions of nonresidents spend part of the year. We often see many people moving here with plans to stay long-term. Despite the initial flush of optimism that comes with a new home, some soon realize they got in over the heads and need to file bankruptcy. Certain financial details can help determine whether the filer qualifies for Chapter 7 or Chapter 13, but residency also is a factor.
Residency is an important issue
Those currently living in Florida can file bankruptcy, but they must generally establish 24-month residency to qualify for the state’s exemptions rather than using the general federal bankruptcy exemptions or those of the state where they previously lived and still have residence. This may be confusing to some because people in all 50 states file bankruptcy through the federal courts — the Tampa Bay/St. Petersburg area is in the Middle District of Florida. However, different states have different exemptions and guidelines to determine whether the newer residents can file in the federal district using the state guidelines.
Important Florida bankruptcy exemptions
This brief list is a general overview of Florida exemptions — those with questions about whether they expressly qualify for these exemptions can reach out to an experienced bankruptcy law attorney:
- Homestead: Residents can exempt an unlimited amount of equity in a home or property that is no larger than a half-acre in a municipality or 160 acres in rural areas.
- Personal property: This applies to $1,000 in property that is not real estate, $4,000 if no real estate is claimed. It also applies to accounts set up for education, health care or hurricane recovery. It applies to other areas of finance as well.
- Motor vehicle: Filers can exempt up to $1,000 vehicle equity (more if a married couple files).
- Wages: This applies to paid and unpaid wages and wages deposited in the last six months.
- Pensions: This includes several retirement plans, benefits, profit sharing.
- Public benefits: This includes veteran benefits, workers’ compensation, unemployment, and other benefits.
- Insurance policies: This includes life insurance paid to a beneficiary, cash surrender and disability benefits.
- Alimony and child support: The filer must be able to support him or herself.
- Other exemptions: There are other exemptions as well, such as a personal injury settlement.
Those planning to file bankruptcy can do so on their own by checking the Middle District’s web site, but many find it helpful to consult with attorneys who handle matters involving Florida bankruptcy law.