What are exemptions and why are they important to people filing bankruptcy in Florida?
Exemptions are rights under the law to shield assets from the claims and reach of creditors. In a Chapter 7 bankruptcy context, these rights protect your assets from seizure and liquidation by the Chapter 7 Trustee.
In a Chapter 13, they can limit the amount of money you are required to pay into your Chapter 13 Plan for the benefit of unsecured creditors.
To find out which laws establish your exemption rights in a Florida bankruptcy, one must first ask, “Did the Debtor live in Florida for the entire 2-year period just before filing the bankruptcy?”
If the answer is yes, then Florida Law determines what property a person can protect. If the answer is no, then you ask, “Where did the Debtor live during the 6-month period that lasted from 2 years and 6 months prior to filing bankruptcy to 2 years prior to filing bankruptcy?”
If the answer to that question is, for example, Wisconsin, then Wisconsin Law is applied. If the answer to the question is more than one jurisdiction, then you ask, “Where did the Debtor live for most of that 6-month period?”, and that jurisdiction’s laws determine what property is beyond the reach of creditors.
For most Florida Bankruptcies, Florida Law will apply.
Their importance is clear, to safeguard assets that are necessary to prevent a person from becoming a ward of the state.
Keep your eye out for future blog posts that will discuss specific Florida exemptions.
Until then, you can lean more at the link below, and remember . . .