Filing for bankruptcy can help individuals who are struggling to manage overwhelming debt to secure a stronger, more stable financial future. Yet, many individuals who could benefit from bankruptcy protections hesitate to file.
One common concern for those considering bankruptcy in Florida involves whether they will lose their furniture and other personal belongings when seeking debt relief. Understanding how bankruptcy laws work in Florida can help alleviate these concerns.
Bankruptcy exemptions
Those who file for Chapter 13 personal bankruptcy are not likely to lose any of their possessions in the bankruptcy process, as they simply work to pay off their debts by submitting manageable monthly sums to the court every month for three to five years.
However, those who file for Chapter 7 bankruptcy do have to take advantage of either federal or state exemptions to protect their property from a risk of sale. Thankfully, Florida offers some of the most generous bankruptcy exemptions in the U.S.
If you are thinking about filing for Chapter 7 bankruptcy, under Florida law, you can exempt up to $1,000 of personal property, (effectively at garage sale prices) which includes furniture. If you do not claim the homestead exemption (which protects the equity in your home, if you don’t rent), this amount increases to $4,000. This means that most everyday household items, including furniture, are likely to be protected in a bankruptcy filing.
In practice, bankruptcy trustees are often more interested in assets that can be sold to significantly reduce debt. Used household furniture generally has limited resale value, and as such, trustees may not find it worthwhile to sell these items. The goal of bankruptcy is not to strip you of all personal possessions but to help you manage and eliminate debt.
