When people face financial hardship, bankruptcy can provide relief and protection. In Florida, specific laws govern what assets individuals may be able to keep. These exemptions often include homestead, personal property (such as an automobile), insurance, public benefits and marital property. Most wage income is often exempt, too.
Certain laws protect a portion of an individual’s wages from creditors during bankruptcy. These protections ensure that individuals can maintain a basic standard of living while resolving their financial obligations.
Head of family exemption
For the head of a family, wages are exempt up to $750 per week. Alternatively, protection is available at the greater of 75% of their earnings or 30 times the federal minimum wage. This exemption applies to both paid and unpaid wages, as well as wages deposited in a bank account within the past six months. In Florida, the median household income is $67,917. This equals about $1,306 per week.
Earnings of others
Individuals who are not the head of the family also get earnings protection. Similar to the head of the family exemption, safeguards apply to 75% of their wages or 30 times the federal minimum wage, whichever is greater.
Federal government employees’ pension payments
Additionally, pension payments for federal government employees, necessary for support and received within three months before filing for bankruptcy, are exempt from creditors’ claims. This exemption provides protection for individuals relying on these payments to meet their basic needs.
By knowing that the law protects wages to a great extent, individuals can better navigate the bankruptcy process and ensure they retain necessary resources for their livelihood.
