Demystifying Bankruptcy-Part 2
Many clients and prospective clients contact us and ask common questions based on advice from their relatives or a “friend of a friend.” These blog entries will dispel common myths and educate you on the general process of bankruptcy in Florida.
QUESTION: Will I lose my personal property if I file Bankruptcy?
One of the benefits of consumer bankruptcy is that it allows extraordinary relief that cannot be accomplished outside of bankruptcy. First, Florida allows a $1,000.00 ($2,000.00 if filing jointly with your spouse) exemption for Household Goods and $1,000.00 ($2,000.00 if filing jointly with your spouse) exemption for your Automobile which allows you to protect from creditor (and Bankruptcy Trustee) claims. In addition, if you do not own a Homestead property (i.e. primary residence), you can receive an additional $4,000.00 wildcard exemption ($8,000.00 if filing jointly with your spouse) for any additional personal property which is protected from creditor (and Bankruptcy Trustee) claims. Please note that the exemptions apply towards equity in your asset. For example if you own a car and it is worth $8,000.00 and you owe your lender $7,000.00, you would be able to exempt $1,000.00 of equity.
In Chapter 7, you can pay a lump sum (or in a few payments) to the Chapter 7 trustee to “buy back” the equity in your personal property.
If you desire to keep your personal property and cannot pay the equity in a lump sum, Chapter 13 Bankruptcy is an excellent option as it allows you to pay back the equity over a three to five year period. If you are unable to pay any funds back to keep the personal property, then the Bankruptcy Trustee would auction the non-exempt property to pay back your creditors. If any of your personal property is worth in excess of the exemptions, it is very important to hire an experienced bankruptcy attorney to assist you in determining whether it would be proper to file a Chapter 7 (liquidation) or a Chapter 13 (repayment plan for wage earners). For more information, please contact the experienced bankruptcy attorneys at The Wallace Law Group with a convenient office location in Boynton Beach representing clients in Boynton Beach, Delray Beach, Boca Raton, West Palm Beach, Greenacres, Wellington, Fort Lauderdale, Coral Springs, Deerfield Beach, Parkland, Hollywood, Weston, Aventura, Miami, Miami Beach.