Considering Filing for Bankruptcy? Know Your Rights...

A deal gone bad, a sudden loss of income, or a number of other unforeseen financial situations can put you in a spot where you may have no other option but to file for bankruptcy.

However, it is important that you understand your rights before hiring a bankruptcy attorney in Orlando FL, as it will speed up the process of getting you back on your feet financially.

If you find yourself staring down your creditors, here are a few things that you should understand first...

If you own your home free and clear, it is likely safe

One of the biggest fears that debtors have when filing for bankruptcy is that they will end up losing their home during the proceedings that follow.

While this is certainly a concern for those with mortgages, unpaid property taxes, outstanding bills to home renovators, or if there has been a lien placed against their home, those that have paid their loan off completely should have nothing to fear.

However, if you claim that you have no money to pay your bills and you still owe thousands of dollars on your home, the bank or other creditors has every right to seize it in order to get as much of their money back as possible.

Upwards of $4,000 in personal property can be declared exempt from seizure

Even if your home is not safe from seizure, you are still entitled to protect up to $4,000 worth of personal property from creditors.

This is in addition to a separate $1,000 exemption on any vehicle you may own (note: this does not apply if you owe money on a vehicle loan), and it can be combined with the personal property exemption in order to protect a vehicle with an appraised value of up to $5,000.

One notable exception to this provision is that if you owe money for alimony or child support, you will not be able to protect your personal property from being seized and liquidated.

Jointly owned property is generally safe from creditors

A common worry of married couples is that if one of the members of the relationship incurs a debt that cannot be paid, jointly-held property might end up being seized.

Under Florida law, anything that is jointly owned by a married couple is not eligible for seizure by creditors if they are going after one specific individual. However, any couple going through this needs to go to court with their bankruptcy attorney and file an affidavit that certifies that a specific piece of property belongs to both parties.

Individually held assets, however, can not be changed to jointly-held assets once bankruptcy proceedings have begun, as this can cause it to lose any exemption for which it might have been eligible.