Florida’s Bankruptcy Wildcard Exemption

Most bankruptcy laws are federal and thus, bankruptcy proceedings are relatively uniform throughout the country.  However, one area where states vary is bankruptcy exemptions, property that is excluded or put differently, safe from forced sale during bankruptcy.  Florida’s exemptions include an exemption for “homestead” properties, which was discussed in earlier bankruptcy blogs.
bankruptcy wildcard exemption
Those who do not “claim or receive the benefits of” a homestead exemption, have one unique advantage in Florida, the ability to claim a personal property exemption of $4,000 for an individual debtor or $8,000 for joint debtors pursuant to Florida Statute 222.25(4).  This is called the “bankruptcy wildcard exemption,” because the debtor has discretion to choose the personal property that he or she wants to exempt.
Who Gets the Bankruptcy Wildcard Exemption?
For debtors that don’t own a home, the application of the rule is straightforward: they can claim the wildcard exemption.  Debtors that do own a home may still be able to claim the exemption but the issue is trickier and turns on the meaning of “claiming or receiving the benefits” of the homestead exemption.  Florida Courts are still working out the contours of this phrase, however, the following are a few key principles pulled from bankruptcy courts in Florida:

  • Mere ownership of a home does not preclude the debtor from claiming the bankruptcy wildcard exemption.  In Re Morales, 381 B.R. 917 (Bankr. S.D. Florida 2008)


  • Where there is no equity in a home and debtors don’t attempt to claim a homestead exemption, they are entitled to claim the bankruptcy wildcard exemption.  In Re Iuliano, 457 B.R. 124 (Bankr. M.D. Fla. 2010)


  • A debtor that no longer claims a homestead exemption may be eligible for the bankruptcy wildcard exemption even though they have claimed a homestead exemption in the past and are living in the home.  Osborne v. Dumoulin, 55 So. 3d 577 (Fla. 2011)


  • An individual debtor cannot claim the bankruptcy wildcard exemption if their spouse has claimed a homestead exemption in property jointly owned as tenants by the entireties.  In re Barandiaran, 477 B.R. 842 (Bankr. M.D. Fla. 2012)

How is the Bankruptcy Wildcard Exemption Amount Calculated?
Once entitlement to the bankruptcy wildcard exemption is established, the issues become: what is personal property and how the $4,000 limit is calculated.  Personal property is generally any non-real estate property.  The value of personal property is calculated based on its fair market value, in other words, what the debtor could reasonably expect to obtain if the property was sold.  As most personal property depreciates after purchase, this generally favors the debtor, allowing him or her to exempt more property than if a different valuation method, like purchase price were used.
What Other Exemptions Are Available?
The bankruptcy wildcard  exemption is, of course, not the only exemption available to debtors.  To learn more about bankruptcy and what property may be exempt, contact the Jacksonville bankruptcy attorneys at Adam Law Group today.