Will I Lose My Assets if I File Bankruptcy?
Many people put off filing bankruptcy because they are afraid they will lose their assets. In reality, most people who file Chapter 7 bankruptcy in Florida get to keep their personal residence and all of their personal belongings.
At The Law Offices of John E. Mufson, we provide a free initial consultation to evaluate your assets and let you know if those assets would be exempt from liquidation. If you have assets that you would lose by filing Chapter 7 bankruptcy, you may be able to keep those assets by filing Chapter 13 bankruptcy.
What Assets Can I Keep When I File Chapter 7 Bankruptcy?
Under Federal and Florida law, you are allowed to claim certain assets as exempted, which means that those assets need not be liquidated during bankruptcy.
In most instances, your primary residence will be exempt. If you owned your primary residence for more than 40 months, all equity in your home is fully exempt. If you owned your home less than 40 months, up to $125,000 in equity is exempt.
Assets kept in a qualified retirement plan cannot be taken away from you. This means that your 401(k) savings and pension plans are safe. Your life insurance is also exempt.
You are allowed exemptions of $2,000 (if married) or $1,000 (if single) for other personal property, which includes your furniture, appliances, jewelry, clothing, collectables and sports equipment. If you don’t own a home, the personal property exemption is $10,000 if married and $5,000 if single. These amounts are “replacement value,” which will be much less that you paid for the items. Unless you have antiques or fine furniture, your personal property will usually not be a major issue in bankruptcy.
If you have a car, you may or may not be able to keep it, depending on how much it is worth and how much equity you have in it. In Florida, you can only keep $1,000 in equity for a motor vehicle. However, it you are making payments on the vehicle, you can usually can keep it as long as you keep making payments.
Free Lawyer Consultation
To discuss exempt and nonexempt assets with bankruptcy attorney John E. Mufson, call us or fill out the contact form on this Web site. Our law office is located in downtown Delray Beach, across the street from South Palm Beach County Courthouse.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.