Clients come see me in my Miami or Fort Lauderdale bankruptcy offices and they easily qualify for Chapter 7 bankruptcy in Florida, however they have assets, and their assets are not going to be fully protected in a Chapter 7 filing. The clients don’t qualify for the Chapter 13 bankruptcy and so they ask me the following question: “What happens if I file Chapter 7 bankruptcy in Florida and I am over the allowed exemptions?”
Here are some possible answers/suggestions to the question above:
Surrender the over-exempted assets:
Your first option and probably the easiest option would be to surrender your over-exempted property to the bankruptcy estate. This may be surrendering your car, jewelry, liquidating a bank or a stock investment account, or turning over any asset you may have. While this sounds like a bad idea, and my clients tell me they read online that “they can keep all their assets,” from a business stand point this makes perfect sense. If you think about it, in your bankruptcy you are wiping out thousands, tens of thousands, even hundreds of thousands of dollars worth of debt, and in exchange you may need to give up an asset worth a fraction of the amount that you owe.
Buy Back the over-exempted asset:
Some trustees will give the debtor the option to buy back the items that are not exempted. This is a win-win for both parties because the trustee doesn’t have to hire someone to sell the item and the buyer can just pay the amount they are over-exempted by and keep their belongings. While some trustees will allow the debtors to enter into a payment plan to keep the over-exempted belongings (payment plans can range for one to six months), I must stress that the bankruptcy trustees are not “IN THE COLLECTIONS BUSINESS.” The trustee has the right to do whatever he or she wants, including not allowing you to enter in a payment plan and giving you the option to pay by the end of the week or they will sell the item. If you are thinking of buying back your over-exempted assets I suggest you call a family member or a friend and ask them if they will be willing to help you out if the trustee will not enter into a payment plan with you.
If you are thinking of filing in South Florida and would like to schedule a free consultation with a local bankruptcy attorney then please contact Ofer Shmucher at Shmucher Law, PL by calling 305.741.5553 or 954.309.5559. Consultations can take place in our Miami office or any of our satellite offices (by appointment) including Boca Raton, Fort Lauderdale, and Sunrise Florida.