The exemption that most people know about is the “Homestead Exemption”. This is the exemption stated in Article X Section 4 of the Florida Constitution. It states that (with some exceptions) the home you or your family live in shall be exempt from forced sale under process of any court and no judgment, decree or execution shall be a lien thereon.  The bottom line is that the trustee and creditors cannot take your house no matter how much equity you have in it.

HOWEVER even though you are entitled to an unlimited homestead exemption if you don’t file bankruptcy once you file bankruptcy the rules are different. Under 11 U.S.C. 522(p)(1) a debtor may not exempt any amount of interest (which means equity) that was acquired by the debtor ,during the 1215-day period (i.e. 3 years and 4 months) period prior to filing for bankruptcy, that exceeds $135,875 in value. This means that if a person has purchased a home 2 years ago for $300,000 and paid all cash then, if he files for bankruptcy, the trustee could sell the home and keep $164,125. IN THIS CASE FILING FOR BANKRUPTCY MAY NOT BE ADVISABLE.

Under the Florida Constitution a person (debtor) is entitled to an exemption of one thousand dollars in personal property.

Under F.S. 222.25 (1) there is an exemption of $1,000 in value of a single motor vehicle.

AND if you don’t claim (or receive the benefit) of a homestead exemption regarding your home THEN you can exempt another $4,000 in personal property (F.S. 222.25(4)).  This is called the “Wildcard Exemption”.

Some people have tried to use this Wildcard Exemption by not listing their house as exempt in the bankruptcy papers. They do this because they know that because their house is worth must less than what they owe on it they believe (quite rightly) that the creditors aren’t going to take it anyway.  The courts have held that if your intent is to keep the home then ,even though you don’t claim a homestead exemption in your bankruptcy papers, this will not allow you to use the Wildcard Exemption. This is because ,even though you are not claiming the Homestead Exemption, you are still “receiving the benefits of the homestead exemption”.

HOWEVER if you own a mobile home that is on a rental lot then you can claim the mobile home as exempt under F.S. 222.05 and also claim the Wildcard Exemption i.e. the additional $4,000 of personal property exemption. This does not apply if you own both the mobile home and the land it sits on.

Also remember that in a joint case i.e. where both the husband and wife are filing for bankruptcy, the exemptions are doubled i.e. the $1,000 personal property exemption under the Florida Constitution becomes $2,000, the $1,000 exemption for the motor vehicle becomes $2,000 and the $4,000 Wildcard Exemption becomes $8,000.

Also the personal property exemptions of $1,000 and $4,000 can be used for the car as well. Therefore if you have a car that is paid for and worth $4,000 you can use the $1,000 car exemption, the $1,000 personal property exemption and $2,000 of the Wildcard Exemption (if you are entitled to it) to exempt the car entirely.

In addition you can exempt the cash surrender value of a life insurance policy (F.S. 222.14), disability income benefits (F.S. 222.18) and pensions (F.S. 222.21).  There are other exemptions you may be entitled to under state law (i.e. earned income credit as a tax refund F.S. 222.25 (3)) which I have not discussed herein.

Additionally, under F.S. 222.201 a debtor may exempt, in addition to any other exemptions allowed under state law, any property listed in 11 U.S.C. 522(d)(10) i.e. the debtor’s right to receive:

  • a social security benefit, unemployment compensation, or a local public assistance
  • a veteran’s benefit;
  • a disability, illness, or unemployment benefit;
  • alimony, support, or separate maintenance, to the extent reasonably necessary
      for the support of the debtor and any dependent of the debtor;
  • a payment under a stock bonus, pension, profitsharing, annuity, or similar plan
    or contract on account of illness, disability, death, age, or length or service, to the
    extent reasonably necessary for the support of the debtor and any dependent of the
    debtor (with some exceptions).

Finally if a husband and wife own property as Tenancy By The Entirety  it may be untouchable by the creditors. This applies to both real and personal property. However if any of the debts are owed by both the husband and wife the trustee can sell the property to satisfy that debt.

Under Florida law a creditor of a single spouse may not execute a judgment on property (such as a bank account) owned as tenants by the entirety.

The benefits of using Tenants By The Entireties instead of the Homestead Exemption are:

  • There are no time limitations i.e. you have to be domiciled in Florida for 730 days immediately preceding the date of filing to use Florida’s exemptions i.e. Homestead. However you can be in Florida one day or even an out-of-state owner to use Tenancy By The Entireties.  This is because the law applicable to real property is the law of the state where the property is located.
  • The property does NOT have to be your homestead i.e. you don’t have to live on it
    and you can have as many as you want
  • The $136,875 Equity cap previously discussed does NOT apply.
  • It can be used by non-permanent residents.

I hope that this paper has given you an idea of what exemptions you can use in Florida.

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