The Bankruptcy Code provides that certain property is considered “exempt”. Exempt property is not considered part of the bankruptcy estate. By being exempt, the property is taken out of the bankruptcy estate and it may not be administered or liquidated by a Chapter 7 trustee to pay creditors. In a Chapter 13 case, exempt property is not counted in the “chapter 7 liquidation test” computation of the amount a person is required to pay back to unsecured creditors under their Chapter 13 plan.
Most persons filing for bankruptcy relief in Florida are required to to use only the Florida exemptions certain federal exemptions. In some cases, such as when a person has not resided in Florida for more than 2 years, the exemptions of another state or the federal bankruptcy exemptions must be used.