Florida is a full-recourse state in regard to mortgage loans. This means that a mortgage default can result not only in the bank taking back the home but also suing for any deficiency.
In fact, the filing of a lawsuit to collect the difference between the home value and the mortgage note after foreclosure is becoming more and more common.
Chapter 7 bankruptcy is a powerful tool that can be used to wipe out this type of debt - even if the amount is as much as several hundred thousand dollars. Chapter 7 is available to relieve this type of debt because at the point the home is taken the leftover debt becomes "unsecured" and therefore able to be dissolved by a knowledgeable bankruptcy lawyer.
Bankruptcy is not just for credit card debt. Sometimes, the wisest thing a person can do is wipe out a foreclosure debt and start over. Call me for details.
Showing posts with label Homestead. Show all posts
Showing posts with label Homestead. Show all posts
Miscellaneous personal property exemption
When a debtor files for Chapter 7 bankruptcy he or she is allowed an exemption of $1,000 dollars ($2,000 for joint filings) for miscellaneous personal items including: cash, household furniture, clothing, and jewelry among other items.
These items are valued based upon the resale value of the item rather than the original cost. In other words, a dining room table purchased for $500 in 1999 might only be worth $100 dollars today. The table would be valued at today's value.
In 2007 the Florida legislature introduced a new "wild card" personal property exemption for the benefit of those debtors who do not claim a Homestead exemption. This personal property exemption is quite large - $4,000 ($8,000 joint filing.)
The presence of these exemptions means that most debtors filing Chapter 7 bankruptcy cases are non-asset debtors who will owe little or nothing to the trustee at the end of the case.
These items are valued based upon the resale value of the item rather than the original cost. In other words, a dining room table purchased for $500 in 1999 might only be worth $100 dollars today. The table would be valued at today's value.
In 2007 the Florida legislature introduced a new "wild card" personal property exemption for the benefit of those debtors who do not claim a Homestead exemption. This personal property exemption is quite large - $4,000 ($8,000 joint filing.)
The presence of these exemptions means that most debtors filing Chapter 7 bankruptcy cases are non-asset debtors who will owe little or nothing to the trustee at the end of the case.
What do you get to keep after filing a Chapter 7?
Florida law determines that certain property is off limits to creditors after a debtor has filed bankruptcy. These items are known as "exempt" from the reach of creditors and cannot be touched.
A short list of these items include: the Florida Homestead exemption, which is unlimited if you have owned the home for 40 or more months; a 1,000 dollar auto equity exemption, a 1,000 dollar personal property exemption, and an exemption upon qualifying IRA savings accounts, 401k plans, social security and disability income, and health savings accounts.
In addition, for persons not claiming a Homestead exemption (usually renters) there is a 4,000 dollar "wild card" property exemption.
Importantly, when a married couple files jointly, all of these exemptions can be combined to double the amount of exempt property.
As you can see, with proper planning and guidance from a bankruptcy lawyer you can really keep a good deal of your non-secured assets even after filing bankruptcy.
A short list of these items include: the Florida Homestead exemption, which is unlimited if you have owned the home for 40 or more months; a 1,000 dollar auto equity exemption, a 1,000 dollar personal property exemption, and an exemption upon qualifying IRA savings accounts, 401k plans, social security and disability income, and health savings accounts.
In addition, for persons not claiming a Homestead exemption (usually renters) there is a 4,000 dollar "wild card" property exemption.
Importantly, when a married couple files jointly, all of these exemptions can be combined to double the amount of exempt property.
As you can see, with proper planning and guidance from a bankruptcy lawyer you can really keep a good deal of your non-secured assets even after filing bankruptcy.
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