Filing for bankruptcy involves a series of tradeoffs. In exchange for the debt relief that you may receive, you either need to surrender certain personal property to the trustee or continue to make payments on your debt. If you file for Chapter 7 bankruptcy, you get greater relief, but you must turn over certain non-exempt property. Even an exemption does not come with an assurance that you can keep your car or home.
To learn more about exempt property in Miami and how bankruptcy may affect you, speak to Consumer Law Attorneys. Our Miami bankruptcy lawyers are ready to help.
Chapter 7 vs. Chapter 13 Property Treatment
How your property is treated depends on the type of bankruptcy protection you elect for when you file. In Chapter 7 bankruptcy, you have the ability to have your unsecured debts discharged at the conclusion of the process. The tradeoff is that you may not get to keep all of the personal property that you had prior to the start of bankruptcy. If your property is not protected by a Chapter 7 exemption, you need to surrender it to the trustee, who will then use the proceeds from the sale to pay your creditors. This way, creditors may get some of the money that they are owed before the debts are discharged.
Your property gets much more favorable treatment under Chapter 13 bankruptcy. You are not required to surrender personal property. However, you do need to make continued payments under your reorganization plan. You do get more time to get caught up on debts that may threaten your continued ownership of things like your car and home, but you must continue making regular payments on these secured debts while you are in the midst of the Chapter 13 reorganization process.
Florida Exemption Laws Explained
When it comes to, Chapter 7 bankruptcyFlorida has relatively favorable exemption laws that allow you to shield much of your property from the general requirement that you must turn over assets to the trustee. The following exemptions may be applied to your property under Florida law:
- Your primary residence is protected from bankruptcy, no matter its value (subject to certain limitations on the acreage of the property)
- You can protect up to $1,000 in equity in your vehicle (each spouse may have their own exemption that they can apply)
- Your household goods and furniture are fully protected if they are essential
- There are $1,000 exemptions for other things, like jewelry and tools of trade
- Other necessary items may be protected on a case-by-case basis
What Happens to Homes, Cars, and Savings?
What happens to each individual asset depends on both its nature and the type of bankruptcy that you have filed. Even if your property is protected from surrender in the bankruptcy process, you still remain obligated to pay loans for homes and cars at the conclusion of bankruptcy. You must get current on your payments and reaffirm the debt to avoid foreclosure or repossession.
Although you do not have to surrender your property in a Chapter 13 bankruptcy, you must also still catch up on payments that you have missed through the reorganization plan. At the same time, you must also resume making regular payments to the lenders, or else you may risk foreclosure or repossession.
You may need to surrender your savings in a Chapter 7 bankruptcy to the extent that they exceed an exemption. You can keep your savings in a Chapter 13 bankruptcy, provided you follow the reorganization plan.
How Miami Bankruptcy Lawyers Help Protect Your Assets
A Miami bankruptcy lawyer can help you protect your property to the fullest extent possible under state law. If you have elected for a Chapter 13 bankruptcy, they can help negotiate a reorganization plan that is realistic and allows you to continue making payments, so you can keep your home or car, while you catch up on payments that you previously missed. If you have filed for a Chapter 7 liquidation in Florida, your bankruptcy attorney can work with the trustee to allow you to keep as much of your property as possible that is essential to your daily life. Their role is to work for you to get the best possible result from the bankruptcy process.
Contact a Bankruptcy Attorney in Miami
If overwhelming debt is keeping you up at night, the experienced Miami bankruptcy lawyers at Consumer Law Attorneys can help. We guide clients through Chapter 7 and Chapter 13 filings, protect your assets, and ensure you understand every step of the process. Bankruptcy does not have to mean that you surrender complete control of your financial situation. Call us today at (877) 241-2200, or message us through our website, to schedule a free consultation and explore your options for debt relief.
