Exempt property is simply property that you can keep when you file Chapter 7 bankruptcy. The basic purpose of bankruptcy is to allow a person who has become overburdened with debt to free himself of that burden and get a " fresh start." The law allows you to keep property. The exemptions are broken down into categories. For Florida residents the exemptions per person are as follows:
Residence: You may keep all the equity in your residence, including a mobile home and burial plots. "Equity" is the value of the property less all debts or liens secured by it. Since 4/20/05 The Homestead Exemption is limited to $125,000.00 equity if the Debtor has owned the home (or homes in the same state) over 2 years but less than 1215 days (3.3 years). Any equity in a homestead which is the result of a fraudulent transfer is not exempt for ten years from the date of transfer.
Motor Vehicle: You can claim up to $1,000.00 in equity in one motor vehicle.
Household Goods: You can claim exemptions of up to $1,000.00 for yourself, plus $1,000.00 for your spouse, in items such as household furniture, clothes, jewelry, etc. You value these items at a price at which you can sell them, not at their original cost or replacement value. Since July 1, 2007 if you do not claim homestead exemption you have a $4000.00 wild card personal property exemption.
Life Insurance: Life insurance policies insuring the life of the debtor in which his or her spouse and/or children are named beneficiaries are totally exempt.
Wages: Your earnings for personal services rendered within 60 days of filing the bankruptcy which are necessary for the support of you and your family such earnings remain exempt even though, they have been deposited in a bank account.
Tenants By The Entirety: Any real estate (not just a residence) owned by a husband and wife jointly is exempt from any creditor (other than IRS) who has a claim against just the husband or wife. It is not exempt from a creditor who has a joint claim against both the husband and wife. If you own real estate jointly with your spouse with a large amount of equity, it may be crucial to know what joint debts you have with your spouse.
Health Aids: You can claim an unlimited amount of professionally prescribed health aids for the debtor or a dependent of the debtor (e.g., wheel chair, hearing aid and the like).
Compensation for Injuries: Compensation for personal injuries and workman's compensation is exempt.
Retirement Benefits IRA accounts: Retirement benefits of Florida Teachers, State Employees, Local Government Employees, and Federal Civil Service Employees are exempt. Individual retirement accounts are exempt. Your interest in an ERISA qualified retirement plan (401-K account, pension or profit sharing plan) is also protected from your creditors.
Government Benefits Veterans Administration, Social Security and AFDC benefits are exempt.
Other specific benefits and property are exempt.
Under certain circumstances, personal property purchased less than 90 days prior to filing bankruptcy cannot be claimed as exempt. Therefore, if you plan to file bankruptcy do not purchase any property other than consumable goods. If you have purchased property within 90 days you need to discuss the details with us.
*If your property exceeds the amount of exemptions, and you are not willing to risk losing it, you need to concentrate on the Chapter 13 bankruptcy**
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William T. Shaffer and the William T. Shaffer Law Group are considered debt relief agents and they provide bankruptcy services. Please read the following terms of services & legal notices ("this agreement") these disclosures are required under section 527 and 342 of the bankruptcy abuse prevention and consumer protection act of 2005.
