Part II
Homestead, Personal Property, and Enhanced “Wildcard” Exemptions

Last week we began discussing some general bankruptcy information. This week we will focus our attention on Florida’s exemptions. Specifically, the Homestead and personal property exemptions.

Bankruptcy property guidingRemember from last weeks blog that exempt property is out of the reach of the Trustee and creditors alike. Bankruptcy aside, it’s beneficial to be familiar with these exemptions because they are not bankruptcy specific, but are protections against creditors and judgments in general.

“The exemption rights granted to Florida citizens by the state constitution are designed to protect individuals from utter destitution, thereby relieving the State of the burden of supporting destitute families.” In re Dwyer, 305 B.R. 582 (Bankr. M.D. Fla. 2004).

In the bankruptcy context, some states allow a debtor to choose between the Federal bankruptcy exemptions or their state exemptions. Every state is different, and whether they use Federal or state exemptions, there are common exemptions across the board. Florida law requires debtors to use Florida’s statutory exemptions and for purposes of these discussions, we will focus only on these exemptions.

Homestead:     Florida law protects your Homestead from being attacked or levied by creditors. There is no limit on the value of your home you can exempt as long as your Homestead is less than a ½ acre in a municipality or 160 contiguous acres if outside a municipality. See: Homestead Blogs

Vehicle:     Further, Florida law allows for a $1,000 vehicle exemption. Although this number is low in comparison to vehicle exemptions in other states, the unlimited value protected in your Homestead is intended to make up for it.

Personal Property:       In addition, Florida law permits a debtor to exempt any personal property up to $1,000 which would double ($2,000) if Husband and Wife file jointly.

Enhanced Personal Property Exemption:   This enhanced “wildcard” exemption, when applicable, increases the personal property exemption (above) by $4,000. A debtor is permitted to claim both personal property exemptions for a total of $5,000 in personal property exemptions. However, it only applies if the debtor does not “claim” or “receive the benefit” of a Homestead exemption.

“Intent of the statute setting forth Florida’s enhanced personal property exemption appears to be to give a debtor who lacks homestead protections some extra personal exemptions so that the debtor will have a minimal amount of property from which to restart his or her life.” In re Kent, 411 B.R. 743 (Bankr. M.D. Fla. 2009).

Generally, the issue is not whether the debtor “claimed” the Homestead protections but whether he/she “received the benefit” of it. As I’ve discussed in my previous blogs, there are different Homestead protections in Florida. Of these protections, the only one that is relevant to this exemption is the protection from creditors. The fact that you may get the benefit of ad valorem tax discounts on your Homestead has no bearing here whatsoever.

The Florida Supreme Court has stated that, “The “benefits” cited in statute providing a personal property exemption to debtors who do not claim or receive the benefits of the constitutional homestead exemption refer only to the protection of the homestead from the reach of creditors provided by the constitutional homestead exemption and not to other constitutional or statutory tax exemptions related to one’s homestead or other advantages of owning or occupying a home.” Osborne v. Dumoulin, 55 So. 3d 577 (Fla. 2011).

In conclusion, when the benefits of a Homestead are not “claimed” or “received” by a debtor, the debtor can increase his personal property exemption from $1,000 to $5,000.  Next week, in light of this exemption, we will discuss why not having equity in your home could possibly help a debtor in bankruptcy.

 This is a generalized discussion on Ch.7 Bankruptcy’s. It is not intended for any particular set of facts and should not be relied upon as such. By no means does this blog create an attorney-client relationship or attorney-client privilege between the Attorney and the readers. The law frequently changes as new cases are published regularly. Anything relied upon in this or any blog is done so at the readers own risk.

Federal bankruptcy law and Florida’s statutory exemptions are complex and difficult to navigate. If you are considering a bankruptcy in Southwest Florida, or are interested in discussing your options, you should speak with a licensed Florida attorney. If you would like schedule a free consultation, or have any questions, comments, or suggestions on upcoming topics, please comment below or email

The Guirguis Law Firm, PLLC
1423 S.E. 16th Place, STE 204
Cape Coral, Florida 33990
239.573.9939 Telephone
239.603.9939 Facsimile

Posted on August 22, 2012, in Legal and tagged , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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