When you file for Chapter 7 bankruptcy, you have the option to use what is called the “wildcard exemption.” This exemption allows you to keep $1,000 of any piece of personal property. Another option to keeping a specific piece of property is if you decide not to use the homestead exemption that gives you another $4,000 to use toward another piece of personal property. In other words, you can keep property that isn’t otherwise covered by the state’s bankruptcy exemptions.If your problems or lost wages was caused by a car or truck accident, you should also contact a good personal injury lawyer.
Hiring a Lawyer that will review all of this with you so that you can make an informed decision about how you want to preserve your assets if you have any to preserve. Many people who file Chapter 7 bankruptcy have few assets or none at all.
Keeping Your Property
Filing Chapter 7 bankruptcy means wiping out debts unless the debts are student loans, child support, and tax debts. In exchange for wiping out these debts, you have to turn over assets and property to your bankruptcy trustee so they can liquidate them and distribute the proceeds among creditors. This only occurs if you have the assets and property to liquidate. Even if you have assets, they may fall within the exempt dollar amounts, allowing you to keep them.
How the Wildcard Exemption Works
Florida has a number of exemptions that apply to specific pieces of property. For instance, you are allowed to keep your vehicle if it has up to $1,000 in motor vehicle equity. If it has more than that, then it can be liquidated to satisfy creditors. So if you have two cars that have $2,000 in equity, you can apply the wildcard exemption to one of them and keep the car. If you choose to not use the homestead exemption, you can take $1,000 from the $4,000 and apply it toward the other car so you can keep both of your cars.
There are many choices that have to be made in this process. Your bankruptcy lawyer will review your assets and property with you, helping you valuate them so that you can decide what to apply your wildcard exemption or any other exemption credits toward.
If you are married and filing bankruptcy together, you can double your wildcard exemptions. This means you could have up to $10,000 in exemptions available to use toward your personal property. You can stack exemptions and you can split them between items. There is a lot of flexibility in how you can use your exemptions, which allows you to retain as much of your property as possible.
Words of Caution
You want to make sure you don’t sell property to a friend or family member in order to protect it. Doing so within a specific amount of time before filing bankruptcy can result in fines and a lot of headaches. It is best to talk to your attorney first because you may be surprised at what you can save through exemptions, minimizing property loss. It is the fact that property loss is minimal or non-existent that people turn to bankruptcy lawyer as a debt relief solution. Keep in mind if your financial problems are the result of lost work or injury due to an auto accident, you should consult a personal injury lawyer.