No, filing for bankruptcy does not mean that you will lose everything. This is a common misconception, though, and it makes some people wary of filing. They believe that they are going to have to sell all of their assets, and so, even though they may be out of debt, they will be in a worse position than they were before.
Chapter 7 bankruptcy is known as liquidation bankruptcy, and it does often require selling assets. However, you only have to get rid of non-exempt assets, and there are many exemptions that you can use.
For instance, Florida has a homestead exemption. That means you can exempt any equity in your house. There is also a wage exemption that can protect as much as $750 per week in earnings.
On top of that, there are personal property exemptions that you can use for things like electronics or home furnishings, typically set at $1,000, but increased to $4,000 for those who are not going to utilize the homestead exemption. There is also a $4,000 wildcard exemption for individuals and an $8,000 wildcard exemption for couples.
The type of bankruptcy you file
The next thing to remember is that you do not necessarily have to file for Chapter 7 in the first place. If you file for Chapter 13 bankruptcy, you generally do not have to liquidate assets at all. Instead, your debt is consolidated into a repayment plan, and you then make monthly payments for the next three to five years.
Considering your options
This helps to show that you are not going to lose everything if you file for bankruptcy in Florida. You just need to know how the system works, and an experienced attorney can help.
