Often an individual seeking to file bankruptcy in Florida is often fearful of having some or all of their property seized by the trustee. In most chapter 7 cases handled by a competent attorney, the debtor will
be able to retain ownership of their real and personal property while discharging their unsecured
debts. With respect to household furnishings and appliances,the items will in many cases fall within the allowed exemption of $1,000.00 for individuals and $2,000.00 for married couples. Only where the residence contains antiques,collectibles or an expensive piano will there be an issue with respect to the allowed exemption.Also,if the debtor is renting or surrendering their home through foreclosure the the "wildcard" exemption is applied and which is $5,000.00 per individual and $10,000.00 per married couple.
For motor vehicles the allowed exemption is $1,000 unless you are renting,whereby you can then use the $5,000/$10,000 wildcard exemptions. As the value of used cars has increased significantly since the March 2011 earthquake in Japan, it has become more difficult for a debtor with equity in their car to file Chapter 7. If a debtor has a car with $5,000 in non exempt equity in a car, in order to keep the car,they will have to either borrow money from a relative or take money out of a 401K/IRA to pay the trustee the non exempt value.
Sometimes,a debtor is unable to use either of these options and thus does not want to file Chapter 7. The other option would be to file bankruptcy under Chapter 13. Thus, if the debtor has $15,000 in equity in two cars, the debtor would remit ($15,000 divided by 60 months) for a total of $250.00
per month plus an additional $25.00 to the Chapter 13 trustee who administers the case. In addition,the debtor would have to be able to establish that they have the ability to make the chapter 13 payments.
If you need further information about property exemptions, please contact the law office of John E. Mufson P.A. at mufsonlaw@aol.com
