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Can I keep my house if I file for bankruptcy with $80,000 debt?

Can I keep my house if I file for bankruptcy with $80,000 debt?

Full question:

Can I file for bankruptcy if I have debt of $80,000 and have 100.00 cash in the bank and a house valued at $250,000 which has no liens on it? Will I be able to keep my house?

Category: Bankruptcy
Date: 04/07/2025
State: Florida

Answer:

When filing for bankruptcy, understanding "exemptions" is crucial. In Chapter 7 bankruptcy, a Trustee may sell your "non-exempt" property to pay unsecured creditors, but you can keep your "exempt" property regardless of its value.

The definition of exempt and non-exempt property varies by state. Each state has specific laws regarding which assets are protected during bankruptcy. Therefore, it’s essential to consult with a bankruptcy attorney to determine what assets you can keep based on your state’s laws.

In Florida, for example, there is an unlimited homestead exemption, which means you can keep your home as long as you meet certain residency requirements. However, eligibility for Florida exemptions depends on your residency status for the two years before filing. If you have not been a Florida resident for that period, you may be subject to the exemption laws of your previous state of residence.

In summary, if you qualify for Florida's exemptions and your house is your homestead, you should be able to keep it even with $80,000 in debt and $100 in cash.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What is the minimum debt to claim bankruptcy?

There is no specific minimum debt required to file for bankruptcy. Individuals can file for bankruptcy regardless of the amount of debt they have. However, the type of bankruptcy you choose may depend on your financial situation and the amount of debt. Consulting with a bankruptcy attorney can help determine the best course of action for your circumstances.

How much cash are you allowed to keep in bankruptcy?

The amount of cash you can keep during bankruptcy varies by state due to different exemption laws. In many states, you may be allowed to keep a certain amount of cash as an exempt asset. For example, Florida allows individuals to keep $1,000 in cash or other liquid assets in a Chapter 7 bankruptcy. Always check your state's specific laws or consult an attorney for guidance.

Can I declare bankruptcy and keep my money?

Yes, you can declare bankruptcy and still keep some of your money, depending on your state's exemption laws. Most states allow you to keep a certain amount of cash or assets. For instance, in Florida, you can keep $1,000 in cash as an exempt asset. It’s important to consult with a bankruptcy attorney to understand what you can retain.

Can I file bankruptcy if I have money in the bank?

Yes, you can file for bankruptcy even if you have money in the bank. However, the amount you can keep depends on your state's exemption laws. In some states, you may be allowed to retain a certain amount of cash, while any excess may be considered non-exempt and could be used to pay creditors. Consulting an attorney is advisable to navigate these rules.

How much money can I have in my bank account during bankruptcy?

The amount of money you can have in your bank account during bankruptcy is determined by state exemption laws. In Florida, for example, you can keep $1,000 in cash or liquid assets. Anything above this amount may be considered non-exempt and could be used to pay off debts. Always check your state's laws or consult a bankruptcy attorney for specific guidance.

What disqualifies you from filing bankruptcy?

Several factors can disqualify you from filing for bankruptcy, including having filed for bankruptcy in the past and not waiting the required time period, or failing to complete required credit counseling. Additionally, if you have committed fraud or dishonesty in your bankruptcy filings, this can also disqualify you. It's best to consult with an attorney to understand your eligibility.