What Assets Can I Keep if I File for Chapter 7 Bankruptcy?

When people struggle financially, they may be tempted to file for bankruptcy. Bankruptcy has a lot of good points. One main benefit is that it can eliminate debts. There’s nothing like a fresh start, especially if you are filing for Chapter 7 bankruptcy.

One of the main downsides with this type of bankruptcy, though, is that many of your assets may have to be sold or liquidated to repay creditors. This means that some people could lose their cars or other assets during bankruptcy.

So you may be wondering: what can I keep? Florida does offer some exemptions, so it is possible that you can protect some money, personal property, and even real estate. However, you need to understand how to use these exemptions to your advantage so you can keep what is important to you. Here is a look at the assets you can keep if you file for Chapter 7 bankruptcy.

Real Property

Florida has a generous homestead exemption that allows you to protect an unlimited amount of value in your home. However, there are some exceptions. The property cannot be larger than a half-acre (in a municipality) or 160 acres (outside a municipality). You must have owned the property for 1,215 days before you file your bankruptcy case.

Personal Property

Depending on whether you own a home, you can protect personal assets with values up to $1,000 if you own a home, and $4,000 if you don’t own a home.  You may even be able to keep your car if its value (or equity) does not exceed $5,000 and you are current on loan payments.

Retirement Accounts and Pensions

Retirement accounts such as 401(k) plans and IRAsare usually fully exempt under federal law, so they cannot be taken by creditors.

Wages and Benefits

Wages are exempt under Florida law to some degree. Also, Social Security benefits, unemployment benefits, and disability benefits are generally protected and cannot be taken by creditors.

Contact Our West Palm Beach Bankruptcy Attorney Today

Bankruptcy can help eliminate a lot of debt, but it may eliminate some assets as well. Make sure you understand what you can keep and what you cannot.

Do not attempt bankruptcy on your own. See how West Palm Beach bankruptcy attorney Brian K. McMahon, P.A. can provide you with relief. To schedule a consultation, call (561) 658-1789 or fill out the online form. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.