Record inflation and economic uncertainty is placing financial pressure on families across Florida. Unfortunately, the increasing cost of groceries and other expenses can lead to unavoidable debts that quickly become overwhelming.
When debt becomes unmanageable, Chapter 7 bankruptcy can offer much-needed relief and the opportunity to return to economic security.
In a Chapter 7 bankruptcy, a court-appointed trustee will sell or liquidate some of a person’s assets and distribute the proceeds to creditors. The bankruptcy court then discharges – or wipes out – most remaining debts. In essence, bankruptcy provides a fresh financial start.
While the prospect of property liquidation may seem scary, the law exempts certain types of property from liquidation, meaning a bankruptcy filer is able to retain ownership of some property during and after the bankruptcy.
Common exempt property
Many important assets are exempt from liquidation. Among the most important exemptions is for a filer’s primary personal home. As long as the filer has resided in the residence for at least two years before filing bankruptcy, the filer generally will not lose their home.
Much of a filer’s wages also are exempt, as are most retirement benefits and public benefits such as Social Security or workers’ compensation.
Personal property and automobiles are exempt up to $1,000, although a filer who owns a vehicle worth more than $1,000 is often able to work out a payment plan to keep their automobile. Life insurance proceeds and tools needed for a filer’s occupation are also generally exempt. There are a number of less-common exemptions as well.
Seeking bankruptcy relief
If debt has become unmanageable, bankruptcy offers a fresh start while allowing filers to keep many of their most valued assets, such as their home. It is important to speak with a knowledgeable bankruptcy attorney to evaluate options and understand the impact of bankruptcy on a filer’s financial future.
