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How Florida debtors start anew through Chapter 7 bankruptcy

On Behalf of | Feb 26, 2024 | Chapter 7 Bankruptcy

Those who have hit financial rock bottom usually hesitate to file for bankruptcy because of shame, guilt, low self-esteem and fear of losing savings and personal property. But bankruptcy itself can help solve debt problems. Of the many options to navigate bankruptcy, many consider Chapter 7 bankruptcy, which causes an end to collection efforts of creditors and have most or all debts written off.

What is Chapter 7 bankruptcy?

Also known as “a liquidation bankruptcy”, this type of bankruptcy requires debtors to pass the means test to prove that their income is less than the median family income for their household size. A court-appointed trustee then decides on which assets can pay off debts. In Florida, many assets are exempt from recovery for those who have lived in the state two years before filing bankruptcy.

Among the exempt assets are:

  • Homestead: The house and land owned by the individual for at least 1,215 days before filing (must be half-acre at most in a municipality or 160 acres or less in other areas)
  • Personal property: Anything you own worth under $1000 or if you take the homestead exception, anything you own worth below $4000
  • Wages: No more garnishments on the head of the family’s wages of up to $750 every week
  • Certain benefits: Includes most pension and retirement funds, a life insurance policy’s cash surrender value and social security benefits
  • Other personal property: Household items and personal effects like clothes, keys, mobile phone, laptop and art

In addition, those who filed for Chapter 7 bankruptcy will get a discharge from debts except for the ones stated by the U.S. Bankruptcy Code. The non-dischargeable debts are alimony, child support, most student loans, court restitution orders, criminal fines and nearly all taxes.

Getting a fresh start

Recovering from a financial slump is a tall order that debtors anxiously face. With the many exempt assets and dischargeable debts in Florida, Chapter 7 bankruptcy may be the way you regain control of your financial life.


Kingcade & Garcia | A Miami Law Firm