When considering filing for bankruptcy, there are 2 main areas of finances that we look at most prevalently, your income and the value of your assets. Assets include everything that you own that has some type of value to it, whether a folding table worth $5 or a vehicle worth $5,000. When filing bankruptcy, you will always be provided some level of protection for the value of your assets. We call these protections “exemptions” in bankruptcy. These exemptions are determined by where you are filing your bankruptcy action.
Some states allow for you to choose between their state exemptions or the Federal bankruptcy exemptions. Florida is not one of those states. If you have been a resident of Florida for at least 730-days (2 years) preceding the bankruptcy filing, then you must use the Florida exemptions. What happens if you have resided in Florida for less than 730-days (2 years)? We then use the “180-Day Rule” to determine which states exemptions you can take, and whether that state allows you to choose between that state's exemptions or the Federal exemptions. This rule means that we must determine where you were domiciled for most of the 180-day (6 month) period BEFORE the 2 years preceding your bankruptcy filing.
For example, you lived in Georgia from January 1, 2010 through July 15, 2020. You moved to Florida permanently on July 16, 2020. It is now January 1, 2021 and you want to file for bankruptcy. If you decide to file now, you would have to use Georgia exemptions because you were domiciled there for the relevant 180-day period prior to your bankruptcy (which is July 1, 2018 through December 31, 2018). Georgia may allow you, as a non-resident now, to choose between taking either Georgia exemptions or Federal exemptions.
Depending on the state's exemptions and whether they allow you to choose, it may be more beneficial for you to choose the state's exemptions, Federal exemptions, or wait until you have resided in Florida for 730-days (2 years) in order to claim the Florida exemptions. These are all analytical and strategic parts of the bankruptcy filing process and an experienced bankruptcy attorney will be able to help you decide what would be the best route for you.
Check back for another blog regarding Florida exemptions, and what those exemptions mean for you and your assets in bankruptcy in Florida. We do have a couple additional blogs discussing specific Florida exemptions, like the homestead exemption. If you have any questions or concerns regarding exemptions, which you can take, how much value will be protected, etc. please call and schedule a free consultation with one of our experienced bankruptcy attorneys.
