If you are a small business owner located in Southwest Florida and you’re considering filing for bankruptcy, there are some key important factors to know first. Once you and ZinnLaw file your petition for small business bankruptcy, an automatic stay goes into effect. This stay stops creditors from trying to continue to collect on debts or from pursuing legal action against your business. This can give you time to work on a plan to either liquidate the business or reorganize it.
Of course one of the first concerns everyone worries about when filing for bankruptcy is whether or not they will lose all of their assets, and luckily for you Florida has some exemptions in place that can allow you to keep certain assets. Let’s take a look at the personal assets that may be exempt from being used to pay off business bankruptcy debt in Florida.
- If you own a primary residence here, Florida’s homestead exemption protects a certain amount of equity you have in it. The size of the property (acreage) and where it is located, whether that is urban or rural can affect the amount of the exemption.
- Retirement accounts such as 401Ks, IRAs and pension are generally exempt, along with annuities.
- Life insurance policies are typically protected in bankruptcy cases.
- The state has a vehicle exemption that protects a certain amount of equity in one motor vehicle.
- Florida has an exemption in place that protects certain personal property including furniture, tools of the trade, clothing and household goods up to a value of $4,000.
- The wages of someone who qualifies as head of household are exempt, as are some generic exemptions such as medical savings accounts, unemployment benefits, disability income, and health aids.
- Under federal laws, social security is also exempt.
Our attorney’s at ZinnLaw will help you understand the process and protect your assets to the fullest extent possible.
If you are filing for Chapter 7 bankruptcy, there are certain non-exempt personal assets that may be used by the court to pay off your business debts, and it is important that you know what these include.
- Your non-homestead property or second home is at risk when filing for Chapter 7 bankruptcy, as it is not exempt and may be liquidated to pay off creditors. This includes investment properties, and rental properties whether you rent them out on a yearly basis or as an Air BNB kind of situation.
- We know we listed retirement accounts as being exempt, but if the court deems that you have excess funds in those accounts they may be used to pay off debts.
- Non exempt vehicles such as recreational vehicles (RVs), recreational quads, or expensive cars may be sold to pay off creditors.
- Items such as boats, high-end electronics or artwork are considered to be non-essential luxury items that may be sold off to pay debts.
- Certain types of bank accounts and investments may not be protected by bankruptcy exemptions, and as such are at risk for being seized to pay off creditors.
It’s important to note, that if you file for Chapter 11 bankruptcy and you retain ownership of the business and reorganize it, personal assets may not be at risk with one exception. If you, as the small business owner, provide personal guarantees for the business debts, you may be putting your personal assets at risk.
Contact ZinnLaw for Assistance
If you are deeply in debt with your small business, you may want to consider filing for bankruptcy. Talk with one of our experienced attorneys. ZinnLaw can help you create a plan for how to handle your business bankruptcy. To find out more about filing for bankruptcy for your small business, call Brian Zinn for a free consultation to look over your case (239) 418-1529, (239) I-1 U-1 LAW or go to our website www.zinn.law to schedule a complimentary consultation.