Last time, we started discussing how those with concerns about having to hand over assets as part of the Chapter 7 bankruptcy process must understand that the law sets forth certain bankruptcy exemptions that enable filers to retain most or even all of their property.
In particular, we focused on how the state of Florida’s motor vehicle exemption provides that a bankruptcy trustee cannot seize a person’s vehicle if its equity is worth up to $1,000.
It’s important to understand, however, that even if the equity in a person’s vehicle exceeds this $1,000 threshold, it doesn’t necessarily mean it’s destined to be sold by the trustee and the proceeds used to cover unsecured debts.
That’s because Florida law provides for additional bankruptcy exemptions that can allow a filer to exempt considerably more in equity in their vehicle:
- The personal property exemption: The Florida Constitution provides that a person can safeguard up to $1,000 of personal property. Here, it’s possible that this $1,000 exemption could be applied to cover the extra equity in a vehicle.
- The wildcard exemption: State law dictates that in the event a person does not use the homestead exemption to protect their residence in a Chapter 7 filing, they are granted an additional $4,000 personal property exemption. Here, it’s possible that this $4,000 exemption could be applied to cover the extra equity in a vehicle.
Some other important points to keep in mind about Florida’s motor vehicle exemption include:
- Chapter 7 filers in Florida can only use the state’s motor vehicle exemption, not the federal motor vehicle exemption.
- The initial Florida motor vehicle exemption of $1,000 doubles to $2,000 for married couples.
- The Florida motor vehicle exemption applies only to a single vehicle.
Please consider speaking with an experienced legal professional if you have any questions regarding bankruptcy exemptions or the Chapter 7 bankruptcy process.