Florida Bankruptcy Exemptions and Law

Bankruptcy is often a last resort for those facing serious debts. The U.S. Bankruptcy Courts are governed by the U.S. Bankruptcy Code, but states make their own rules about the property you can protect from creditors. This is known as “exempt property.”

The Bankruptcy Code offers federal exemptions, but Florida residents are required to use state exemptions. Florida has “opted out” of the federal exemption system. Instead, state law governs what you can protect. In many cases, it protects more than the federal exemptions.

Florida’s exemptions are among the most favorable in the country, but they only apply to filers who meet strict residency requirements. You must have lived in Florida for at least two years before filing for bankruptcy. If not, you must apply the rules in the state where you lived during the six months prior. Federal exemptions are used if you no longer qualify for the exemptions in your previous state.

If you’re considering bankruptcy and need help understanding which process best applies to your case, contact a Florida bankruptcy lawyer near you. They can provide you with crucial legal advice.

The Two Types of Consumer Bankruptcy

To understand how the exemption process works, it helps to know that there are two commonly used types of personal bankruptcy. These are:

• Chapter 7 Bankruptcy: Chapter 7 allows you to eliminate most of your unsecured debt. It’s only available if your income is under the state median for a household of your size or if you can pass a means test. While you’ll lose all of your non-exempt assets, Chapter 7 can erase most of your non-secured debts.
• Chapter 13 Bankruptcy: Chapter 13 lets you reorganize your debt into a plan paid off over three to five years. Any remaining debt after that time is usually discharged. Chapter 13 is a popular choice for people who want to keep most or all of their property, but need more time or better terms to pay their debts.

Regardless of which type you choose, the court issues an automatic stay when you file. This stops any collection actions against you, including foreclosures and most court cases. The stay gives you breathing room to resolve your debt problems without being harassed by creditors.

Secured vs. Unsecured Debt

Under Chapter 7 and Chapter 13 bankruptcies, your debt will be divided into two categories: secured and unsecured. Each type is treated differently during bankruptcy.

With unsecured debt, creditors don’t have the right to repossess your property for failure to pay. These debts are the most likely to be significantly reduced or eliminated during the bankruptcy process. Credit card debt, court judgments, medical bills, and some unpaid income taxes are common examples of unsecured debt. Others, such as unpaid child support, can’t be eliminated in bankruptcy and must be repaid in full.

Secured debt means a creditor has the right to seize your property if you fail to pay. Home mortgages, car loans, and property liens are the most common types of secured debt.

Chapter 7 bankruptcy can eliminate most or all of your unsecured debt. Creditors holding secured debt can still repossess your property for non-payment. You may lose your home, car, or other property to secured lenders in Chapter 7.

There are usually three options for dealing with secured creditors:

• Give back the property: You’ll lose the secured property, but won’t need to make additional payments
• Make payments: Florida’s generous homestead exemption can help you keep property
• Buy the property outright: Rare in Chapter 7, as most lack the funds for such a payment

Chapter 13 bankruptcy lets you create a plan for repaying your creditors. Current mortgage payments are separate and not part of the repayment plan. A trustee can often negotiate a repayment agreement if you fall behind. Unsecured debts are repaid with whatever income is left after the secured creditors have been paid. Any non-mortgage debt will be eliminated once you have completed the plan.

Am I Eligible for Bankruptcy in Florida?

If you meet Florida’s two-year residency requirement, you must also pass a means test to file for Chapter 7. There are two means tests used.

The first stage looks at your household income. You take your income from the past six months, average it, then annualize it. If that number is less than the Florida median for a household of your size, you qualify.

The U.S. Trustee Program updates the median figures every six months. For cases filed on or after November 1, 2025, the Florida median income figures are:

• One-person household: $68,085
• Two-person household: $84,305
• Three-person household: $95,039
• Four-person household: $111,819

Larger households add $11,100 per additional member.

If your income exceeds the state median, you may still qualify under the second stage based on your disposable income. Calculate your monthly disposable income by subtracting allowable expenses from your current monthly income and project that figure over 60 months. If your projected disposable income over 60 months is less than $10,275, you can file under Chapter 7. Otherwise, you’ll be required to file for Chapter 13 instead.

To file for bankruptcy under Chapter 13, your unsecured debts can’t be above $526,700. Secured debts can’t exceed $1,580,125. These limits apply to cases filed on or after April 1, 2025.

Florida Bankruptcy Exemptions

Florida has its own bankruptcy exemption laws. Many of the Florida exemptions are more generous than those offered under federal law. The state’s strict residency rules are in place to prevent out-of-staters from taking advantage of the exemptions.

Homestead Exemption

Florida‘s homestead exemption is one of the strongest in the country. It lets you protect the full equity in your primary residence, with no cap on the dollar amount. If you own a home valued at $1 million with no mortgage, your creditors cannot force you to sell.

The exemption covers homes on properties of a half-acre or less in a municipality, or on properties of 160 acres or less elsewhere. FindLaw’s Florida Homestead Exemptions article can answer any questions you have on the subject.

To claim the unlimited exemption, you must have owned the home for at least 1,215 days (around three years and four months) before filing. If you have owned it for less than that, a federal cap limits how much equity you can protect. The current cap is $214,000 for cases filed between April 1, 2025, and March 31, 2028.

Wage Exemption

If you qualify as a head of family, your wages are fully exempt from garnishment. Disposable earnings at or below $750 per week are automatically protected. Earnings above that amount are equally protected unless you signed a written waiver allowing otherwise.

If you do not qualify as head of family, garnishment is limited to either 25% of your disposable earnings or the amount by which your earnings exceed 30 times the federal minimum wage per week, whichever is less. These limits are set by the federal Consumer Credit Protection Act. Exempt wages you deposit into a bank account stay protected for up to six months after the deposit.

Personal Property Exemptions

Personal property that falls into one of the following categories will be exempt in Florida:

• Personal property of up to $1,000, which increases to $4,000 if you do not use the homestead exemption (includes items like furniture, art, and electronics)
• Health savings, education savings, and hurricane savings
• Tax credits and refunds
• Prescribed home health aids
• Money you have placed in Florida‘s Preneed Funeral Contract Consumer Protection Trust Fund to cover funeral expenses
• Some of the property in a business partnership

Other exemptions may also be available.

Wildcard Exemption

If you don’t use the homestead exemption, you can use a “wildcard” exemption on up to $4,000 of personal property. The exemption doubles to $8,000 if you file jointly with your spouse. It can also be claimed if you own your home but have no equity to protect with the homestead exemption. This happens when you owe the mortgage holder more than the home is worth.

Motor Vehicle Exemption

A 2024 legislative change increased Florida‘s motor vehicle exemption, allowing you to protect up to $5,000 of equity in a single vehicle. If you don’t claim the homestead exemption, the $4,000 can be stacked on top, providing up to $9,000 in vehicle protection.

Pension Exemptions

Most types of pension and retirement funds are exempt, including:

• Tax-exempt retirement accounts under Florida law, including 401(k)s, 403(b)s, profit-sharing plans, money purchase plans, SEP and SIMPLE IRAs, and traditional and Roth IRAs (IRA and Roth IRA balances are also protected under federal law up to $1,711,975 per person for cases filed between April 1, 2025, and March 31, 2028)
• Teachers’ retirement benefits
• Public employee retirement benefits
• Firefighter and municipal police pensions

If you’re uncertain about an exemption, speak with a Florida bankruptcy attorney.

Insurance and Benefits Exemptions

Florida residents may exempt the following:

• The proceeds from a life insurance policy payable to a specified beneficiary
• Disability income benefits
• The cash surrender value of a life insurance policy
• The proceeds of an annuity contract, except for annuities set up for lottery winners
• Fraternal society benefits

Florida’s exemptions offer more protection than those of other states.

Public Benefits Exemption

The following benefits are exempt from bankruptcy in Florida:

• Social Security benefits
• Veterans’ benefits
• Workers’ compensation and unemployment benefits
• Crime victim’s compensation benefits unless you are trying to discharge debt related to a crime-related injury.
• Local public assistance benefits
• Reemployment assistance benefits

Alimony and Child Support Exemptions

Child support payments and alimony are exempt to the extent they are reasonably necessary for your support.

Exemption for Some Damage Awards

Damages for injuries received while working in a hazardous occupation are exempt. All other proceeds from lawsuits or pending legal claims belong to the bankruptcy estate. If the lawsuit wasn’t resolved when you filed, the trustee can retain an attorney and decide whether to settle or proceed to trial.

What Happens to Non-Exempt Property?

If you file for Chapter 7, the bankruptcy trustee can sell any property not covered by an exemption and use the proceeds to pay your creditors. Chapter 13 works differently and is intended to allow you to keep all of your property. The value of any non-exempt assets affects how much you’ll pay unsecured creditors through your repayment plan. Non-exempt property doesn’t get sold, but its value sets a floor on what creditors must receive.

Where Do I File for Bankruptcy in Florida?

Florida federal courts are split into three districts, each with its own bankruptcy courts. If you’re unsure of the nearest bankruptcy court, use the Federal Court Finder.

The Northern District operates bankruptcy courts in:

• Tallahassee
• Pensacola
• Gainesville
• Panama City

The Middle District operates bankruptcy courts in:

• Fort Myers
• Jacksonville
• Orlando
• Tampa

The Southern District operates bankruptcy courts in:

• Miami
• Ft. Lauderdale
• West Palm Beach

Double-check to make sure you’re in the correct courthouse.

How Much Does Bankruptcy Cost in Florida?

Filing under Chapter 7 in Florida will cost you $338 in filing fees. The filing fees for a Chapter 13 case are $313. These are the same whether you represent yourself (“pro se“) or have a lawyer. You can ask to pay the filing fee in installments over 120 days or seek a fee waiver if your income is less than 150% of the poverty line.

While some filers represent themselves in bankruptcy, most will hire an attorney for the complex undertaking. Hiring an attorney can vary widely based on where you live in Florida and the complexity of your case, but a Chapter 7 filing will usually cost you between $1,000 and $2,500. A Chapter 13 filing often runs between $2,500 and $5,000. Some lawyers will charge more if your mortgage needs to be renegotiated.

Looking for Help Filing for Bankruptcy in Florida?

If you can’t pay your bills and don’t see your financial situation improving in the future, it’s a good idea to meet with a Florida bankruptcy attorney. A bankruptcy lawyer will assess your situation and discuss whether filing for bankruptcy is your best option. If you do choose to file bankruptcy, a lawyer will assist you in deciding whether to file under Chapter 7 or Chapter 13.

A bankruptcy filing is a complex process, and your creditors will have lawyers to protect their interests. A bankruptcy attorney will understand the complexities of bankruptcy law and ensure that you fulfill your legal obligations while retaining as many of your assets as possible.