What Assets Are Exempt in Personal Bankruptcy?

Filing for bankruptcy can be a scary time in a person's life. If you're like many, you're probably full of questions as to what to expect during the process and what happens next.

In a Chapter 7 bankruptcy and a Chapter 13 bankruptcy, you can discharge all of your dischargeable debts, essentially giving you a fresh start. Chapter 7 bankruptcy is a liquidation bankruptcy, and the theory is that the trustee collects all of your assets and sells (liquidates) the assets that are not exempt. The proceeds of the liquidation are then distributed to your creditors. You are allowed to keep and protect all exempt assets. So, the next logical question is: What are exempt assets in Florida?

What Assets Are Exempt?

Like all states, Florida has its own set of exemptions, and Florida citizens who meet the citizenship requirements may use Florida exemptions when filing for Chapter 7 bankruptcy.

What Is the Homestead Exemption?

The homestead exemption could be the largest asset protection exemption in a bankruptcy case. If a person is eligible to claim the exemption, they can claim an unlimited amount of homestead equity as exempt. This exemption definitely helps people who file for bankruptcy and have no mortgage on their homes. The other States are not so liberal in the amount of equity that can be protected. However, the key to claiming the exemption is eligibility. You need the advice of an experienced bankruptcy attorney to assist you when claiming the exemption and whether you should file bankruptcy at all. You do not want to file bankruptcy and risk your home in a liquidation proceeding. If you have any questions about your homestead equity and whether you are eligible for the homestead exemption, my advice would be not to file bankruptcy until your questions are answered.

Personal Property

Debtors in Florida who use the Florida exemptions are also allowed to claim $1,000 worth of personal property as exempt. This normally includes household goods and furnishing, clothing, personal items, pictures, hobby equipment, etc. It is not uncommon for individuals to have more than $1,000 of personal property. This cap doesn't mean that a person who files bankruptcy will automatically lose their stuff either.


Debtors in Florida who use the Florida exemptions are also allowed to claim $1,000 of equity in a car they own as exempt. If your car has a loan against it, you must determine the equity in the vehicle (if any). If your car is leased, you must determine if there is any equity in the lease agreement. If so, you must claim your exemption. Lastly, if you own your car free and clear, it may be wise to get a retail appraisal on the vehicle prior to filing for bankruptcy to determine the actual value of the vehicle before the filing of your bankruptcy case.

Retirement Plans

Florida protects a wide variety of retirement plans like 401Ks, IRAs and pension plans; however, this comes with a warning. You must look at each plan individually before filing for bankruptcy protection. I hate to sound like a broken record, but, I would always have your plan reviewed by experienced bankruptcy counsel prior to filing the bankruptcy to make sure that the plan is exempt from creditor's claims.

Other Assets

This article does not list all of the assets that an individual can claim as exempt in a bankruptcy case because there are entirely too many to list. The best course of action, in any bankruptcy case, is to disclose all of your assets to your bankruptcy attorney and discuss each one to make sure that there are no assets left behind.