One of the most common fears people have about filing a bankruptcy is that all their possessions will be sold in an auction and creditors paid with the proceeds.
The truth is that although bankruptcy is a legal process that occurs in the federal court system, state laws control what types of property and how much is protected when a bankruptcy is filed.
In other words, if you have lived in a state for more than the past two and a half years, the laws of that state will control what property is protected and which assets may be at risk. If you have not lived in your state for at least the past two and a half years, the laws of the state where you previously resided will typically be applied.
Different states have different strategies regarding what should be protected in a bankruptcy.
In Florida, homestead equity is given great protection. Retirement accounts are protected. Other types of personal property are protected to a dollar value of $1000.00 per person, with an additional value of $1000.00 available to protect equity in a car. If a person is not claiming the homestead exemption, an additional $4000.00 is available to protect personal property.
So a couple filing a Florida bankruptcy that has no equity in their home might be able to protect up to $12,000 of auto equity and other personal property, if they are filing jointly, and depending on whether autos are jointly owned.
Thinking of filing a Melbourne, FL bankruptcy? Considering a Deltona, FL bankruptcy? Call (321) 253-6223 or (386) 218-4973 for a free consultation! Visit us in Melbourne, Florida at SpaceCoastBankruptcy.com. Visit us in Orange City, FL and Deltona, FL at VolusiaBankruptcyLaw.com.