One of the biggest concerns I receive from my bankruptcy clients is what will happen with their home. Most people are afraid they will lose their home, or the equity in their home, when filing bankruptcy. Fortunately, for Florida residents, the homestead protection in bankruptcy is generous.
The protections provided to bankruptcy filers for their home, vehicle, and other personal property are called exemptions. The exemptions for Florida residents are determined by the Federal bankruptcy code or the Florida statutes and Constitution. If you have lived in Florida for more than 2 years when you file bankruptcy, you would have to use the Florida exemptions. If you have not lived in Florida for more than 2 years when you file, you would have to use the Federal exemptions, or sometimes the exemptions of the state you resided in prior to Florida.
Florida homestead exemptions are much more beneficial for homeowners than other states exemptions or Federal exemptions. If you have owned your home for less than 40 months in Florida, up to approximately $160,000 of equity will be protected. If you have owned your home for more than 40 months, an unlimited amount of equity in your home is protected. The Federal exemptions are much less liberal. If you are forced to use Federal exemptions, you are able to protect up to $25,150 of equity in your home ($50,300 if married, filing jointly). If you have more equity in your home then able to be protected under Federal exemptions, it is usually better to wait to file when you can utilize the Florida homestead exemptions. As always, there are many additional questions and exemption concerns when filing, this is just generally the most important for homeowners in Florida. If you have any questions regarding exemptions or filing bankruptcy in Florida, please feel free to contact our firm for a free bankruptcy consultation.