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Chapter 7 bankruptcy is described
as a liquidation of a debtor’s non-exempt assets. The property of the
debtor is owned by a trustee and the debtors unprotected assets are
liquidated by the trustee under the chapter 7 bankruptcy law. During
the process, the trustee sells the property of the debtor and the gains
made are used in paying-off the creditors. Though most of the debtor’s
assets may be sold, however the Bankruptcy code of chapter 7 allows
debtors of bankruptcy to retain some of his/her basic assets. These
retainable assets are known as exempt properties. Some of the
properties that may be exempt in a Florida Bankruptcy include;
1. Homestead; Under article X ,
section 4 of the Florida constitution, your homestead is an exempt
property. This protection is accorded properties which are only located
on half acre of land or less, within a municipality and not more than
160 acres outside a municipality. The homestead exemption is applicable
to all Florida residents only. It is very important to note that the
New Bankruptcy law has changed the homestead exemption for Florida
residents who file bankruptcy . You can protect unlimited equity in
your homestead under this new law. Such protection will only be allowed
if the homestead have been purchased not less than 40 months prior to
filing for bankruptcy. If you purchased your home within 40 months, the
new law exempts up to $137,000 of equity. This exemption had been
increased with effect from April 2007 . Married couples can file for a
joint exemption on two homestead which must be valued for a maximum
amount of $274,000.
2. Statutory exemptions; These
are exemptions of the Florida statutes which include several categories
of exempt properties . They include; Pension, tax deferred retired
plans, social security income, health savings accounts, college
investment plans, Cash value of life insurance, and many others.
3. Automobile exemptions; An
individual creditor is allowed to exempt up to $1,000 of equity in an
automobile. The exemption is subjected to the condition of the car, and
if the balance of your car loan is greater than the value of the car,
then you have no car equity.
4. Miscellaneous personal equity
; Individual debtors are allowed to exempt $1,000, or $2,000{ for joint
exemptions} on personal effects which include; clothings, foods,
estimated cash in hand, and tools, this exemption will be determined by
the current value of those personal effects in the present market.
Contact an Orlando Bankruptcy Attorney today and you will be glad you did.
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