Florida Exemptions

[jabe71]

Just curious....Not using homestead exemption. I understand you have up to $1,000 to use toward an automobile. My question is personal property...do you have $1000 plus $4000 for a total of $5000 to use towards personal property or just $4000 total? Thanks in advance for the help

[justbroke]

First, it is not just using but "receiving" the benefit of the exemption. So if you are keeping a home and have even $1 of equity, then you are receiving the benefit. If you are not receiving -- or claimed -- that benefit then your constitution unlimited homestead exemption becomes a "statutory" wildcard exemption of $4,000 (per debtor). You can use that exemption to cover other property such as your car and other personal property.

The problem if you do have a home and don't claim the benefit, some Florida Chapter 7 Trustees have sought to sell the home. They do this to earn a carveout. So if you have a home in Florida, you're keeping the home, and are filing Chapter 7, you must be very careful in your strategy.

[jabe71]

Let me clarify...I am a renter. I neither currently own a home or have ever owned a home. Yes I understand that I am "receiving" the benefit of the $4000 wild card exemption. Am I also entitled to the $1000 of person property exemption?

[jabe71]

I own a 2007 Kia Spectra with 220,000 miles so my $1000 exemption for an automobile covers that easily

[justbroke]

Let me clarify...I am a renter. I neither currently own a home or have ever owned a home. Yes I understand that I am "receiving" the benefit of the $4000 wild card exemption. Am I also entitled to the $1000 of person property exemption?

I'm sorry, I meant receiving the benefit of the homestead exemption. If you don't have a home, then there is no way you could receive the benefit of using it -- the unlimited homestead exemption -- to protect a home.

So you will get to use $4,000 as a wildcard against any property.

[Ekop785]

I have this EXACT question (also a renter in FL). Car is worth $4500 so $ 1,000 (vehicle exemption) + $ 3500 (taken out of wildcard) leaves me with $ 500 to cover all of my belongings??

Guess trustee will be coming for my tv and sofa?

Sheesh, FL is great if you want to keep a million dollar home, but pretty crappy if you are just trying to keep an old car.

[justbroke]

Exactly. Florida gives you the ability to keep the $8,000,000 home but not the $200 couch!

Some Florida trustees have been known to just send an appraiser to the home. The trustees have then been known to negotiate with the debtor or send everything to auction.

Yes, it's tough to keep a $4,500 vehicle in a Florida bankruptcy without giving up something else.

(For clarification, it is either the constitutional $1,000 exemption for personal property or a $4,000 exemption if you don't claim -- or receive the benefit of -- the unlimited homestead exemption.)

[Ekop785]

Thank you, justbroke. Perhaps I could use the KBB 'fair value' or average it in with the 'good' condition. My car does need new tires and the upholstery is in horrible condition. But mechanically, it only needs general servicing.

Do you think trustee might accept 'fair condition" from KBB? Or is NADA more widely used?

[justbroke]

From what I can remember, the Florida Trustees use "good" condition from NADA, Black Book, or Kelley Blue Book. Any of those would be fine for valuation, but NADA I found to be the most common.

[Ekop785]

KBB "good" condition came in at $4500. That leaves me $ 500 left in exemptions for everything I own (old stuff, but standard furniture for 1-bedroom apartment and old computer).

I am not sure what happens in this scenerio, but I don't think trustee will dismiss case because I am slightly over, right?

[justbroke]

The Chapter 7 trustee can't dismiss the case because you don't have exemptions to cover property. What could happen is that the Trustee requires you to pay the bankruptcy estate the value which is "over" the exemption amount. The trustee may even send an appraiser to determine the value of your non-exempt property (or all your property in general). Then you'd have to negotiate with the Trustee over the non-exempt value.

As far as the 'good' valuation, you can sometimes argue that the vehicle's value should be reduced. Whether or not that will work is another story. You could also look to the other guidebooks to see how its valued there. I have used Edmunds (online) at times.

[bcohen]

You're overthinking this. In the context of bankruptcy, you value your personal property--which by definition is used--at yard sale value. Similarly, you value your used car at Kelly Blue Book private party for its actual mileage and condition. A smart Chapter 7 (panel) trustee isn't going to challenge the assertion of a debtor living in a small apartment that their personal property has nominal value, or try to pretend that a 14 year old car with 200,000 miles is worth thousands of dollars. The situation where a trustee will send an appraiser to your home is when you own a house, are exempting the house, and claiming that the entire contents of the house are worth less than $1000.

If you rent your home, the trustee will understand that the most valuable personal property contained in the home--the appliances--are owned by the landlord and thus off-limits. The remaining contents of even a two-bedroom apartment are unlikely to sell at auction for more than $1000, and after subtracting storage and auction expenses, it just isn't a worthwhile exercise. Remember, no one wants to buy used furniture, clothing, housewares, towels and linens, etc. unless they are luxury brands. Even typical home electronics have little value for resale.

[justbroke]

For what it's worth, Chapter 7 trustees in Florida use the average ("good") retail value in NADA. Of course a specific Chapter 7 trustee may be more or less inclined to nit-pick, but that's the starting point of the conversation; especially on an unencumbered vehicle.

For other property, a debtor can use garage sale pricing. However, Central Florida Chapter 7 Trustees are notorious for sending an appraiser if they believe that the debtor is undervaluing anything or other factors indicate that the property should be worth more.