Exempt assets are ones the debtors get to keep, and non-exempt assets are surrendered to the trustee? A debtor can ‘exempt” or keep certain assets by applying the appropriate statutes to the asset on the bankruptcy petition. There are numerous factors that determine what assets can be exempt. Ideally a debtor uses all the exemptions allowed by law to protect their assets. Your attorney will discuss with you what assets can be exempt and which cannot be exempt. The bankruptcy Code, local bankruptcy rules and regulations are lengthy and complicated. https://www.usbankruptcycode.org/.
It is possible to keep all your assets. It all depends on the exemptions you claim, the outstanding loans on secured assets (i.e., car or house), what chapter you file under (7 or 13), and where our retirement is vested. If you do not claim the homestead exemption, you have the right to claim a personal property exemption of up to $6,000.00 per person. If you own more than the statute allows you to exempt, you can choose which property to protect and which to surrender. Personal property includes money held in a bank account and most tax refunds.
Do not sell or give away any of your assets.
Do not pay back or give friends or family members money. If you have given money to friends or family members within the past two years, or if you have sold or given away any assets within the past two years, please let your attorney know. You must disclose these transaction(s) or gift(s) to your attorney who will disclose them on your bankruptcy petition to the trustee. Any loss or theft of assets must be disclosed on your bankruptcy petition.
Can I keep my personal property?
If you do not claim the homestead exemption described above, you have the right to claim a personal property exemption of up to $4,000 per person of your personal belongings.
If you own more than $4,000 worth of personal property, you can choose which property to protect. The personal property includes money held in a bank account.
Can I keep my house?
Yes. Many debtors chose to keep their homes. You can keep your home and up to one-half acre of land from if you live in an incorporated area. If you live in an unincorporated area, you homestead and keep up to 160 acres. You must be current on your mortgage if you decide to keep your home and file a Chapter 7.If you’re not current on your mortgage payments, you may need to file a Chapter 13 and catch up the past due amount (arrearages) over 36 or 60 months. Some debtors chose to “surrender” their home, in Bankruptcy. If you surrender your home, you owe nothing to the lienholder, and they get their asset returned.
Is mortgage mediation available in bankruptcy?
Yes. Mortgage Mediation can be ordered by a Bankruptcy Judge and the lender must participate. A Mediation may result in a reduction of your principal, your payments, and your interest. The lien holders can forgive the arrearages or offer many solutions and options to allow a debtor to keep their house. You may be able to strip your 2nd mortgage and discharge the debt as unsecured in a Chapter 13 depending on the value of the homes.
Who can place a lien on my house?
The 1st or 2nd mortgage holder, your H.O.A. (Homeowners association) or anyone who loaned you money to buy, improve or repair your home. The I.R.S.
What if my home was in forbearance?
To combat ongoing misinformation, the Federal Housing Finance Agency (FHFA) stated that borrowers in forbearance with a Fannie Mae or Freddie Mac are not required to repay the missed payments in one lump sum. If the hardship was not resolved, the forbearance plan can be extended. If the hardship has been resolved, the servicer will work with the borrower to set up a repayment plan, modify the loan so the borrower’s payments are added to the end of the mortgage, or set up a modification that reduces the borrower’s monthly mortgage payment. Read more about FHFA and CFPB’s Borrower Protection Program here. To see the actions FHFA has taken to help Americans impacted by the coronavirus remain in their homes please visit FHFA’s Webpage on Coronavirus Actions.
What if I refuse to move from a house I have surrendered?
The circuit court will more than likely issue a writ of possession and the Sheriff’s office will serve it on you and escort you from the premises.
Can I keep my vehicle?
Yes. However, you must be current on your payments. Some debtors surrender their car, meaning they are no longer obligated to pay the debt, but they no longer have use of the car.
Can I keep my life insurance policy or annuity?
Yes, but you must continue to pay your premiums. The cash surrender value of a life insurance policy and the proceeds of an annuity contract is fully exempt. Florida Statute 222.14 exempts the cash value of a debtor’s life insurance on their own life, and the statute also exempts all types of annuities and annuity proceeds. Insurance and annuity payments remain protected after being deposited in a financial account if the funds can be accurately traced back to the exempt annuity or insurance policy. These do not have to be segregated in a separate account so long as the money in the account is traceable.
Will I be able to keep my prescribed health aides?
Any health aids used by you, or your dependents are exempt from being taken by creditors.
What happens if my name is on my elderly parent’s bank accounts?
First, do not remove your name from any bank accounts near when you file for bankruptcy protection. The Trustee may think you are trying to hide assets. If your name is on someone else’s bank account as a custodian or “just in case something happens” disclose the bank account to the trustee.
What if I have received an inheritance or anticipate an inheritance?
Let your attorney know if you have inherited anything within the past two years or whether you anticipate an inheritance soon. If you inherit anything of value or receive life insurance proceeds within six (6) months post filing for bankruptcy you must notify the trustee and it will be part of your bankruptcy estate.