Chapter 7 Bankruptcy in Florida: What You Need to Know


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Florida Bankruptcy Laws Chapter 7 ExemptionsFlorida is known for a popular amusement park, warm weather, beaches, and its population of American alligators — the latter of which was designated as the state’s official reptile (and unofficial general state symbol) in the 1980s. In fact, Gatorade was named after the University of Florida Gators, where the sports drink was first developed.

Other surprising information about the Sunshine State: Its economy is growing faster than many other big states. Among the five most-populated states, Florida’s real gross domestic product grew the fastest in 2016, surpassing even California and Texas.

Despite a healthier economy than most, some Florida residents still struggle with debt. Many turn to bankruptcy to help, and the numbers that do so will likely increase in the wake of the current recession brought on by the coronavirus shutdowns which has spiked unemployment.

There are many misunderstandings about bankruptcy, one of which is the idea that because the Bankruptcy Code is federal law, all bankruptcy cases are exactly the same regardless of where they are filed.

This is not true.

A bankruptcy case filed in Florida will not necessarily have the same outcome as a case filed in Arizona or New Mexico. Florida has its own laws and income guidelines that affect the amount of property you can keep in Chapter 7, as well as whether you qualify to file for Chapter 7 in the first place.

However, before we jump into Florida’s bankruptcy laws, a word about which bankruptcy laws will apply to your case.

Florida Bankruptcy Laws Won’t Automatically Apply Just Because You Live in Florida

Choice of exemption laws is determined by state of residence; however, you’ll need to have lived in Florida for two years before its laws will apply to your bankruptcy case. This residency requirement was put in place to prevent debtors from “forum shopping” and moving to a state with favorable exemption laws. If you’ve recently moved to Florida, your case will borrow its exemptions from the state that you spent the most time in for the 180-day period preceding the two-year look-back period.

In other words, go back two years. Now ask yourself where you spent the majority of the six months that led up to that two-year period. That state is your exemption state.

Florida Homestead Bankruptcy Exemption Protection, and More

If you’ve been living in Florida for two years or more, Florida bankruptcy laws will apply to your case, so let’s jump in and see what we’re dealing with. Florida is an “opt-out state,” meaning federal exemptions are not available. As a practical matter, this is not a huge issue because Florida’s exemption laws are fairly generous. In fact, Florida’s unlimited homestead exemption has become famous as a result of high-profile cases, like O.J. Simpson, who moved to the state to shield assets from creditors. However, if you have ideas of moving to Florida to file for bankruptcy and pull an O.J., think again.

The Florida Constitution grants all Floridians the right to unlimited homestead protection against judgment creditors, regardless of the length of residency. The bankruptcy system works differently.

In bankruptcy, the Florida homestead exemption allows a primary residence of unlimited value to be protected from creditors as long as the debtor has lived in Florida for 40 months or more, and the property is not larger than half an acre in a municipality or 160 acres elsewhere. If the 40-month residency requirement has not been met, the homestead exemption is capped at $160,375 per federal law.

Contiguous property may include lots with separate legal descriptions and separate tax numbers. While mobile homes do not qualify as a homestead under the definition contained in the Florida Constitution, they are exempt under Florida law in Chapter 222. Investment property cannot be protected by the Florida homestead exemption.

So the bottom line is this: in bankruptcy, you don’t get the unlimited Florida homestead exemption unless you’ve lived in the state for 40 straight months. If you’re newer to the Sunshine state, the still generous $160,375 exemption will apply in your case.

For more popular Florida bankruptcy exemptions, see the chart below. Please note that all exemption amounts change periodically, so it’s best to consult with a qualified Florida bankruptcy attorney prior to filing to ensure you can protect your property.

See also: Can Creditors Garnish My Wages in Florida?

Florida Bankruptcy Exemptions

The top 5 exemptions under Florida state law.
Type of exemptionFlorida law
HomesteadUnlimited (when meeting length of ownership requirement), but property must be no larger than half an acre in a municipality or 160 acres elsewhere
Personal propertyUp to $1,000, including furniture, art, and electronics; can claim up to $4,000 if not using homestead exemption
VehicleUp to $1,000; more if married and filing jointly
WagesHead of family fully exempt up to $750 per week, paid and unpaid during the last 6 months
Pension/retirement401(k)'s exempt; IRA’s and Roth IRA’s exempt up to $1,171,650

Do I qualify for Chapter 7 bankruptcy in Florida?

You’ll still hear bankruptcy lawyers refer to it as the “new bankruptcy law,” but BAPCPA (bankruptcy reform) has been around since 2005. The goal of bankruptcy reform was to make it harder for debtors “who could afford to pay something back to their creditors” to file for Chapter 7 bankruptcy.

How does the system determine whether you can afford to repay something to creditors? First, it looks at your income. If you earn less than the median for a Florida family of similar size, you’re presumptively entitled to file for Chapter 7. However, if your income is above the median, your income and expenses will be evaluated under the means test.

The means test is the signature “accomplishment” of bankruptcy reform. It is a complicated government formula that allows deduction of your actual expenses in some cases and only government allowed expenses in others. Too much disposable income after expenses disqualifies you from the relatively speedy Chapter 7 process. A good bankruptcy lawyer will be able to help you crunch the numbers to determine whether you qualify. If you don’t, there’s always Chapter 13.

Florida Median Income Numbers

That last paragraph probably has you wondering: what are the median incomes in Florida? Well, according to the most recent data from May 2017, the average income for a single earner in Florida is $44,576. For a family of four, the number goes up to $72,382. Remember, the family size is important because your income is compared to a household the same size of your own, not a statewide average. For up-to-date information on income statistics, see the United States Department of Justice website.

How much does bankruptcy cost in Florida?

Ah, the cost of bankruptcy — the subject everyone wants to know about, and understandably so. After all, money is tight for those considering bankruptcy, and many consumers are worried as to how they will come up with the money for legal fees. How can you afford a bankruptcy lawyer if you’re broke?

It can be done, and it may be wise to fight your instinct to look for the cheapest attorney. Similarly, pro se bankruptcy — filing for bankruptcy on your own without the help of an experienced attorney — is generally a very bad idea. So, how much is it going to cost?

Prices vary nationally and Florida will be no exception. The Chapter 7 filing fee is currently $335 regardless of market. Attorney’s fees will range anywhere between $750 on the low end to $2,000 on the high end. Yes, the cost of the lawyer is in addition to the filing fee.

Florida Bankruptcy Court Locations

Florida, like many larger states, is divided into multiple federal districts: Northern, Middle and Southern. Each district is further subdivided into divisions so that Floridians have relatively easy access to a federal court.

Here’s where you may have to file for bankruptcy if you live in Florida.

Northern District of Florida Bankruptcy Court

Gainesville: 401 SE First Ave., Gainesville, FL 32601, 866-639-4615

Panama City: 30 W. Government St., Panama City, Florida 32401, 866-639-4615

Pensacola: 100 N. Palafox St., Pensacola, FL 32502, 866-639-4615

Tallahassee: 110 East Park Ave., Suite 100, Tallahassee, Florida 32301, 866-639-4615

Middle District of Florida Bankruptcy Court

Fort Myers: 2110 First St., Fort Myers, Florida 33901, 813-301-5162Note: this location does not accept bankruptcy filings

Jacksonville: 300 N. Hogan St., Suite 3-150, Jacksonville, Florida 32202, 904-301-6490 

Orlando: 400 W. Washington St., Suite 5100, Orlando, FL 32801, 407-237-8000

Tampa: 801 N. Florida Ave., Suite 555, Tampa, Florida 33602, 813-301-5162

Southern District of Florida Bankruptcy Court

Miami: 301 N. Miami Ave., Miami, FL 33128, 305-714-1800 

Fort Lauderdale: 299 E. Broward Blvd., Fort Lauderdale, FL 33301, 954-769-5700

West Palm Beach: 1515 N. Flagler Drive, West Palm Beach, FL 33401, 561-514-4100