When filing for bankruptcy in the state of Florida, there are a number of exemptions available to help a business stay afloat and pay off creditors. These exemptions include the Homestead Exemption, Personal Property Exemption, Motor Vehicle Exemption, and Wildcard Exemption. All of these can be used to benefit a small to medium-sized business, but first, let’s define each of these exemptions.
The Homestead Exemption
The Homestead Exemption is designed to protect the residence of an individual who is filing for bankruptcy in Florida. It allows an individual to protect a certain portion of their primary residence or rental property. The state determines this amount, but it changes periodically, so it is important to research current homestead exemption laws before filing. This exemption can benefit a small business if the business is registered at the owner’s home address. This exemption will allow them to protect the business property without worrying about it being taken by creditors.
The Personal Property Exemption
The Personal Property Exemption protects the property of an individual filing for bankruptcy. This exemption includes items like furniture, jewelry, clothing, electronics, and more. The Personal Property Exemption is typically used to protect the individual’s possessions from creditors and ensure that the debtor is able to keep some items during the bankruptcy process. For small businesses, this exemption can be used to protect any of the business’s furniture, computers, or other items of value that the business may have purchased prior to the bankruptcy.
The Motor Vehicle Exemption
The Motor Vehicle Exemption is designed to protect the value of an individual’s car during bankruptcy proceedings. This exemption is especially important for small business owners as they often use their own vehicles to transport goods or people as part of their business. The amount of the exemption is determined by the year, make, model, and current market value of the vehicle.
The Wildcard Exemption
The Wildcard Exemption is a general exemption allowing a debtor to exempt up to $1,000 in any type of personal property. This exemption can include cash, household goods, motor vehicles, and other items of value. For small businesses, this exemption can be used to protect any business property that has a value of $1,000 or less. The Wildcard Exemption is often used to protect computers, printers, and other items of value that a small business may have purchased prior to the bankruptcy filing.
All four bankruptcy exemptions can be used to benefit a small to medium-sized business in the state of Florida. Each one protects different types of property and can help a company keep some of its possessions safe from creditors during the bankruptcy process. Therefore, it is important to understand how each one works and what it can be used for when filing for bankruptcy.