Bankruptcy in Florida: A Complete Guide

Bankruptcy is a federal legal process that lets people and businesses overwhelmed by debt get a fresh start — either by wiping out most of what they owe or by reorganizing it into a manageable repayment plan. Because bankruptcy is governed by the federal Bankruptcy Code (11 U.S.C.), the core rules are the same in Miami as they are in anywhere else in the country. But one thing makes filing in Florida distinctive: Florida has opted out of the federal exemption system (Fla. Stat. § 222.20), so Floridians protect their property using Florida's own exemptions — most famously the state's unlimited homestead exemption under the Florida Constitution.

This guide explains how bankruptcy works for Florida residents: the difference between Chapter 7 and Chapter 13, who qualifies, what property you can keep, how the means test works, and what happens to your home. This is general legal information, not legal advice. Bankruptcy involves federal law, strict deadlines, and case-specific judgment calls, so consult a Florida bankruptcy attorney before you file.

Bankruptcy is federal — but Florida law shapes it

Every bankruptcy case in the United States is filed in federal court under the Bankruptcy Code, 11 U.S.C. There is no "Florida bankruptcy court" in the state-court sense; Floridians file in the U.S. Bankruptcy Court for the Northern, Middle, or Southern District of Florida, depending on where they live. A federal judge and a court-appointed trustee oversee the case.

Even though the process is federal, state law decides one of the most important questions in any case: what property you get to keep. The Bankruptcy Code offers a menu of federal exemptions, but it also lets each state require its residents to use the state's own exemptions instead. Florida has done exactly that. Under Fla. Stat. § 222.20, Florida has opted out of the federal exemption scheme, so a Florida filer uses Florida's exemptions — found in the Florida Constitution and in Fla. Stat. ch. 222 — rather than the federal list. To use Florida exemptions you generally must have been domiciled in Florida for at least 730 days (two years) before filing (11 U.S.C. § 522(b)(3)); shorter residents may have to use the exemptions of their prior state.

Chapter 7: liquidation and discharge

Chapter 7 is the most common consumer bankruptcy. It is sometimes called "liquidation" because a trustee can sell your non-exempt property to pay creditors. In practice, most Florida Chapter 7 cases are "no-asset" cases — because Florida's exemptions are generous, the filer keeps nearly everything, the trustee sells nothing, and qualifying debts are wiped out in a few months.

A Chapter 7 discharge eliminates most unsecured debts: credit cards, medical bills, personal loans, old utility balances, and deficiency balances after a repossession. It does not erase certain obligations — most student loans (absent an undue-hardship showing), recent income taxes, child support and alimony, criminal fines and restitution, and debts from fraud. To file Chapter 7 you must pass the means test (11 U.S.C. § 707(b)), which compares your income to the Florida median for your household size. A typical case runs about three to four months from filing to discharge.

Chapter 13: reorganization and repayment

Chapter 13 is a court-supervised repayment plan that lasts three to five years. Instead of liquidating assets, you keep your property and pay creditors a portion of what you owe out of your future income, according to a plan the bankruptcy judge confirms. Chapter 13 suits filers who are over the means-test median, who have non-exempt property they want to protect, or who need time to cure a mortgage default and save their home.

Chapter 13 has powerful tools. It can cure mortgage arrears over the life of the plan so you can stop a foreclosure and keep your house. It can "strip off" a wholly unsecured second mortgage in some cases, and it lets you catch up on car payments or back taxes over time. To file, your debts must fall under the Chapter 13 debt limits and you must have regular income. At the end of a completed plan, remaining qualifying unsecured balances are discharged. For a detailed side-by-side comparison, see our guide to Chapter 7 vs. Chapter 13 in Florida.

The means test: who qualifies for Chapter 7

Congress added the means test in 2005 to steer higher-income filers toward Chapter 13. The first step compares your average monthly income over the six months before filing (annualized) to the Florida median income for your household size, as published by the U.S. Trustee Program. If your income is at or below the Florida median, you pass automatically and may file Chapter 7.

If your income is above the Florida median, you move to a second step that subtracts allowed living expenses (many based on IRS and local standards) to calculate your "disposable income." If little or no disposable income remains, you may still qualify for Chapter 7; if a meaningful amount remains, the law presumes abuse and pushes you toward Chapter 13. The median-income figures are updated periodically, so always use the current numbers. Our dedicated guide walks through the calculation: see The Florida Bankruptcy Means Test.

Florida's homestead exemption — your home

Florida's homestead protection is one of the strongest in the country. Under the Florida Constitution, Art. X § 4, the value of your homestead is protected from most creditors without any dollar cap — subject only to acreage limits. A homestead may be up to one-half acre within a municipality or up to 160 acres outside a municipality. This is why long-time Florida homeowners can often go through bankruptcy and keep a home with substantial equity.

There is one important federal limitation. Under 11 U.S.C. § 522(p), if you acquired your Florida home within 1,215 days (about 3 years and 4 months) before filing, the equity you can shield is capped at a federal amount (roughly $190,000, which adjusts every three years). Equity rolled over from a prior Florida homestead may be excluded from that cap. The homestead exemption also covers value, not the mortgage — you must keep paying your mortgage and property taxes, or the lender can still foreclose. Florida homestead interacts deeply with estate planning, too; see our companion overview, Florida Bankruptcy Exemptions and Homestead.

Other Florida exemptions: car, cash, and personal property

Beyond the home, Fla. Stat. ch. 222 and the Constitution protect a range of property. Key exemptions include:

• Personal property up to $1,000 — furniture, electronics, clothing and similar items (Fla. Const. Art. X § 4(a)(2)).
• Motor vehicle up to $1,000 of equity (Fla. Stat. § 222.25(1)).
• Wildcard up to $4,000 in additional personal property — but only if you do not claim and receive the benefit of the homestead exemption (Fla. Stat. § 222.25(4)). Renters and those who surrender a home often use this.
• Head-of-family wages — earnings of a person providing more than half the support of a dependent are largely protected (Fla. Stat. § 222.11).

Because the vehicle and personal-property exemptions are modest, the $4,000 wildcard is a critical planning tool for filers who are not keeping a home. The detailed breakdown is in Florida Bankruptcy Exemptions and Homestead.

Retirement, insurance, and entireties property

Florida law strongly protects retirement and insurance assets. Tax-qualified retirement plans — 401(k)s, IRAs, pensions and profit-sharing plans — are generally exempt under Fla. Stat. § 222.21 and federal law. The cash surrender value of life insurance and the proceeds of annuity contracts are exempt under Fla. Stat. §§ 222.13 and 222.14. Disability income benefits and certain prepaid college and medical savings accounts are also protected.

Married Floridians have an additional tool: property owned as tenancy by the entireties. When a husband and wife own property together as tenants by the entireties, that property generally cannot be reached by a creditor of only one spouse. In a bankruptcy where only one spouse files and the other does not, entireties property may be shielded from that spouse's individual creditors — a nuance worth reviewing carefully with counsel.

What bankruptcy discharges — and what it does not

A discharge is the heart of bankruptcy: a permanent court order that releases you from personal liability for covered debts and stops creditors from ever trying to collect them. Most credit-card debt, medical bills, personal loans, and old deficiency balances are dischargeable.

Some debts survive bankruptcy. Under 11 U.S.C. § 523, you generally cannot discharge child support and alimony, most student loans, recent federal income taxes, debts incurred by fraud, and criminal fines and restitution. Because Florida has no state income tax, there is no Florida income-tax debt to worry about — a small but real advantage compared with high-income-tax states. Secured debts (a mortgage or car loan) are not "discharged" in the sense of letting you keep the collateral for free: to keep the asset you must keep paying; to walk away you surrender it and discharge any deficiency.

The automatic stay: immediate relief

The moment you file, the automatic stay under 11 U.S.C. § 362 takes effect. It is a federal injunction that immediately halts most collection activity — lawsuits, wage garnishments, foreclosure sales, repossessions, and collection calls must stop. For many Floridians facing an imminent foreclosure sale or a garnishment, the automatic stay is the most urgent reason to file.

The stay is powerful but not unlimited. A secured creditor can ask the court to lift the stay to proceed with foreclosure or repossession if you are not maintaining payments or protecting their collateral. Repeat filers may get a shorter stay. Violating the automatic stay can expose a creditor to sanctions, so it is enforced seriously by the bankruptcy courts.

The filing process step by step

A typical Florida consumer bankruptcy follows a predictable path:

• Credit counseling. You must complete a credit-counseling course from an approved agency within 180 days before filing (11 U.S.C. § 109(h)).
• Petition and schedules. You file the petition plus detailed schedules of assets, debts, income, expenses, and exemptions in the proper Florida district.
• Automatic stay. Collection activity stops immediately upon filing.
• 341 meeting of creditors. About a month after filing, you attend a short meeting where the trustee questions you under oath (11 U.S.C. § 341).
• Debtor education course. You complete a second, post-filing financial-management course.
• Discharge. In Chapter 7, discharge typically comes about 60–90 days after the 341 meeting; in Chapter 13, after you complete the plan.

How bankruptcy affects your credit

A Chapter 7 bankruptcy can stay on your credit report for up to 10 years from the filing date, and a Chapter 13 for up to 7 years. That sounds severe, but for many people already behind on debts, the score impact of the filing is smaller than the damage already done by missed payments, collections, and judgments. Most people see their credit begin to recover within a year or two of discharge as they rebuild with on-time payments and secured credit.

Bankruptcy is a federal right, and it exists precisely so that honest but unfortunate debtors can get a fresh start. Weighing it against alternatives — debt settlement, negotiation, or simply doing nothing — is exactly the kind of decision to talk through with a Florida bankruptcy attorney.

Frequently asked questions

Will I lose my house if I file for bankruptcy in Florida?

Usually not. Florida's constitutional homestead exemption (Art. X § 4) protects unlimited home value from creditors, subject to acreage limits. You must keep paying your mortgage and taxes, and a federal cap (11 U.S.C. § 522(p), about $190,000) can apply if you bought the home within 1,215 days before filing. Otherwise most Florida homeowners keep their homes.

Can I keep my car?

Florida exempts up to $1,000 of vehicle equity (Fla. Stat. § 222.25(1)), and you can apply part of the $4,000 wildcard (Fla. Stat. § 222.25(4)) toward a car if you are not claiming the homestead exemption. If your car is financed and you keep paying, you generally keep it; the exemptions matter most for equity above the loan.

Do I have to take the means test?

Yes, if you are filing Chapter 7 as an individual with primarily consumer debts. The means test (11 U.S.C. § 707(b)) compares your income to the Florida median. If you are at or below the median you pass; above it, a second disposable-income calculation applies. See The Florida Bankruptcy Means Test.

Should I file Chapter 7 or Chapter 13?

Chapter 7 wipes out qualifying debts in a few months and works for filers at or below the median with mostly exempt property. Chapter 13 reorganizes debt into a 3–5 year plan and is useful for catching up on a mortgage, protecting non-exempt assets, or filers over the median. Our guide on Chapter 7 vs. Chapter 13 in Florida compares them in detail.

Will bankruptcy stop a foreclosure or garnishment?

Yes, at least temporarily. The automatic stay (11 U.S.C. § 362) takes effect the moment you file and halts foreclosure sales, wage garnishments, repossessions, and collection calls. Chapter 13 can go further and let you cure mortgage arrears over time to keep the home permanently, though a secured creditor can ask the court to lift the stay.

Does Florida's lack of an income tax affect my bankruptcy?

Indirectly, yes. Because Florida has no state income tax, there is no Florida income-tax debt to discharge — only federal taxes and other obligations come into play. The means-test calculation also reflects that you have no state income-tax withholding, which can affect the numbers compared with high-tax states.

What debts cannot be erased?

Under 11 U.S.C. § 523, child support and alimony, most student loans, recent federal income taxes, debts from fraud, and criminal fines and restitution generally survive bankruptcy. Secured debts can be discharged as to personal liability, but you must surrender the collateral or keep paying to keep it.

How long does bankruptcy take?

A Chapter 7 case usually takes about three to four months from filing to discharge. A Chapter 13 case lasts as long as the repayment plan — three to five years — with discharge entered after you complete the plan.

Find a Florida bankruptcy attorney

Bankruptcy combines federal law with Florida's distinctive exemptions, and small mistakes — missing the 1,215-day homestead window, choosing the wrong chapter, or mishandling the means test — can cost you property or a discharge. A Florida bankruptcy attorney can review your finances, determine which chapter fits, and protect the most property the law allows. Many offer free or low-cost consultations, and you can find one through The Florida Bar's lawyer referral service or a local legal aid program.