Fort Lauderdale Bankruptcy Lawyer Blog

Good news! In a Chapter 7 bankruptcy, Florida law protects the cash surrender value of life insurance policies and the proceeds of annuity contracts. Florida Statute 222.14 exempts (protects) from attachment, garnishment or any other legal process.

The important thing in any bankruptcy filing is to be 100% forthright about your assets and disclose them to the court in your petition. For many Florida residents that are considering a Chapter 7 or Chapter 13 bankrutpcy filing, the only significant assets that they have are retirement accounts, annuity contracts or the cash value of their life insurance policies. All of these assets are fully protected under Florida bankruptcy exemption law.

Continue reading "Pembroke Pines Bankruptcy Question: What Happens To The Cash Surrender Value Of My Life Insurance Policy Or My Annuity?" »

As tax season gets closer, you need to consider how filing a Chapter 7 bankruptcy petition in the latter part of the year will affect your tax refund for the following year.

The bankruptcy trustee is entitled to claim a pro-rated portion of your tax refund. For example, if you file a case in October, 2010 and then receive a tax refund of $6000 when you file your tax return in 2011, the trustee can claim 10 months of that return. If you divide $6000 by 12 months, you get $500 per month. Multiply that by 10 months, and you would have to turn over $5000 to the trustee whenever you get your refund.

Earned Income Credit ("EIC"), however, is exempt from attachment, garnishment or other liens resulting from a bankruptcy proceeding or other legal process (Florida Statute 222.25). The trustee is not entitled to any portion of the return that is determined to be Earned Income Credit. This protection applies regardless of whether the EIC is received or commingled with your other financial accounts as long as it is traceable. The only exception to this is when a debt is because of child or spousal support obligations.

Under Florida's Constitution, Article 10, Section 4(a)(2), if you are filing a Fort Lauderdale Chapter 7 bankruptcy, you are entitled to exempt (protect) up to $1,000 of your personal property from creditors. The $1,000 can be used to protect anything of value that you have, including cars. You can spread it out over several items or use it all on one item - the choice is yours.

Florida Statute 222.25(4) allows you to claim an additional $4,000 in personal property as exempt if you are not claiming or receiving the benefit of homestead exemption. What that means is that if you own your home and are living in it at the time you file, you may be receiving the benefit of your homestead exemption even if you don't claim the home as exempt in your bankruptcy filing. The issue of whether you are "receiving" the benefit of homestead exemption is a sticky one that is best left in the care of a lawyer if you are going to challenge whether you are receiving the benefit and try for the extra $4,000.

In the simplest of terms, the additional $4,000 is primarily used by those that are renting their residence or otherwise not a homeowner. Some exceptions may apply to mobile home owners. Contact a bankruptcy lawyer for more information.

Most people are aware that if you are a head of household in Florida and file Chapter 7 bankruptcy, your wages for the past six months are 100% exempt from your creditors under Florida Statute 222.11. But what if you are a single person with no dependents?

Under Florida Statute 222.11(2)(c), non-head-of-household debtors may exempt 75% of wages that were earned in the six months before the bankruptcy filing.

F.S. 222.11 (2)(c) states: Disposable earnings of a person other than a head of family may not be attached or garnished in excess of the amount allowed under the Consumer Credit Protection Act, 15 U.S.C. s. 1673. A further reading of F.S. 222.11(3) shows that these wages deposited into a bank that are received in the six months before filing are protected.

Surprisingly, this section of the law is not as well known and even though it's pretty clearly stated that non-head of household bankruptcy filers can exempt 75% of their wages, this law was challenged by a local trustee. In Re Weinshank, U.S. Bankruptcy Court Case No. 08-25508-PGH was decided by Judge Hyman on May 28, 2009.

The facts were simple enough: Mr. Weinshank was a single man with no dependents who filed for Chapter 7 bankruptcy protection. He had $4,500 in the bank at the time and claimed 75% of that money exempt under F.S. 222.11(2)(c). The trustee disagreed that he was entitled to any Florida exemption for the money because he was not a head of household. The question before the Court was whether Mr. Weinshank could apply F.S. 222.11(2)(c) and (3) to exempt the money in his checking account.

Judge Hyman ruled in favor of Mr. Weinshank, specifically stating:

"Based upon a plain reading of Fla. Stat. § 222.11 and the undisputed facts of this matter, the Court finds that even though the Debtor is not a head of family, he may exempt funds deposited into his Washington Mutual checking account within six months of his bankruptcy filing that can be traced and properly identified as earnings."

If you are thinking about filing Chapter 7 bankruptcy in Broward County, I offer a free consultation to answer your questions and discuss your options. Contact my office today!

Florida Statute 222.25(1) allows you to protect up to $1,000 of equity in a motor vehicle. This exemption can only be used on a car. If your car is only worth $600, you cannot use the remaining $400 to protect any other asset. Additionally, the statute states that you can only use it on a "single vehicle."

That doesn't mean that you automatically lose your car if you have more than $1,000 in equity. Under Florida law, you also have $1,000 in personal property exemption money available that can be used for any type of persona property - including a car. If you do not own a home or otherwise "claim or receive" the benefit of homestead exemption, you also get an additional $4,000 of personal exemption money that you can also use towards any kind of personal property. Once again, that can include your car.

Most people have cars that are financed and between the $1,000 vehicle exemption and their personal exemptions, they find that they have enought to protect their car.

If you have more equity in your car then you can protect, do not despair! If you file a Chapter 7 bankruptcy in Broward County, the trustee may either abandon their interest in your car if there is not enough equity to justify the expense of selling the car. If they don't abandon their interest, they will usually give you the option of purchasing your equity from them so you can keep your car.

A Fort Lauderdale bankruptcy attorney can look at your specific situation and advise you on what your particular outcome may be.

Continue reading "Hollywood Florida Bankruptcy: Do I Lose My Car If I File Chapter 7 Bankruptcy?" »