12 Honest Answers About Filing Bankruptcy in Florida

A plain-language guide from a Florida consumer bankruptcy attorney. Written so anyone can understand it — with the actual law cited underneath, so you can check every word.

If you are reading this, you are probably scared. Maybe a creditor is suing you. Maybe your paycheck is already short. Maybe a foreclosure date is on your calendar. Almost everyone who calls our office starts the conversation the same way: “I don’t want to lose everything.”

Here is the truth: most people who file bankruptcy in Florida lose nothing at all. Not their house. Not their car. Not their retirement. Not their job.

Bankruptcy is not a punishment. It is a law Congress wrote on purpose, to give honest people who fell behind a way to start over. It is in the U.S. Constitution — Article I, Section 8, Clause 4 gives Congress the power to make “uniform Laws on the subject of Bankruptcies.”

Below are the twelve questions we get asked most. Short answers first, then details.

Quick answers at a glance

Your question	The short answer
Will I lose my house?	Almost certainly no. Florida protects your home with no dollar limit.
Will I lose my car?	Most people keep their car.
Can I be fired for filing?	No. Federal law makes that illegal.
Will everyone find out?	Almost certainly not. Nobody is notified but your creditors.
How long on my credit report?	Up to 10 years — but most scores start recovering in 12–24 months.
Will it stop a garnishment?	Yes, usually within a day or two.
Will it stop a foreclosure?	Yes — even the morning before the sale.
Can student loans be wiped out?	Sometimes, and it got much easier in 2022.
What does it cost?	Court fee is $338 (Ch. 7) or $313 (Ch. 13), plus attorney fees.
How long does it take?	Chapter 7: about 3–4 months. Chapter 13: 3 or 5 years.
Do I have to go to court?	One short meeting, by Zoom. No judge.
Should I drain my 401(k) first?	No. Please talk to a lawyer first. This is the costliest mistake we see.

Jump to a question

1. Will I lose my house?
2. Will I lose my car?
3. Can I be fired for filing?
4. Will everyone find out?
5. How long does it stay on my credit report?
6. Will it stop a wage garnishment?
7. Will it stop a foreclosure?
8. Can student loans be discharged?
9. What does bankruptcy cost?
10. How long does bankruptcy take?
11. Do I have to go to court?
12. Should I use my retirement savings to pay off debt instead?

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1. Will I lose my house if I file for bankruptcy?

Short answer: Almost certainly not. Florida has the strongest home protection in the country, and there is no dollar limit on it.

The law calls this an exemption. An exemption is simply a rule that says, “creditors cannot take this thing.” Florida’s home exemption is called the homestead exemption, and it is written right into the Florida Constitution.

Here is what makes Florida special. In most states, you can only protect a set amount of home equity — say $50,000 or $100,000. In Florida, there is no dollar cap at all. If your home is worth $200,000 or $2,000,000, the equity is protected. The only limits are about size: up to half an acre if your home is inside city limits, or up to 160 acres if it is outside city limits.

Two things you do need to know:

First, bankruptcy erases debts — it does not erase mortgages. If you want to keep the house, you keep paying the mortgage. Think of it this way: the mortgage is a rope tied to the house, not just to you. Bankruptcy can cut the rope tied to you, but the rope tied to the house stays. If you stop paying, the lender can still foreclose down the road.

Second, timing matters if you recently moved here or recently bought. Congress added rules so people couldn’t move to Florida the week before filing just to hide money:

• You generally need to have lived in Florida for 730 days (2 years) before filing to use Florida’s exemptions.
• If you bought your home within 1,215 days (about 40 months) before filing, the equity you gained during that window is capped at $214,000.

Example. Maria owns a home in Tampa worth $310,000. She owes $240,000 on the mortgage. That is $70,000 of equity. She bought the house 12 years ago and has lived in Florida her whole life. She also has $48,000 in credit card and medical debt she cannot pay. Maria files Chapter 7. Her $70,000 of equity is fully protected. She keeps making her mortgage payment. Four months later, the $48,000 is gone and she still owns her home.

Already behind on the mortgage? That is what Chapter 13 is built for. Chapter 13 lets you catch up the missed payments — the “arrears” — spread out over three to five years, while you make your normal payment going forward. The lender has to accept it.

The law behind this: Fla. Const. art. X, § 4; Fla. Stat. §§ 222.01, 222.02; Fla. Stat. § 222.20 (Florida “opted out” of the federal exemption list, so Florida rules apply); 11 U.S.C. § 522(b)(3)(A) (730-day residency rule); 11 U.S.C. § 522(p) ($214,000 cap on equity acquired within 1,215 days, for cases filed April 1, 2025 through March 31, 2028); 11 U.S.C. § 1322(b)(5) (curing mortgage arrears in Chapter 13); Havoco of America, Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001) (Florida homestead protection is extremely broad).

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2. Will I lose my car?

Short answer: Most people keep their car. Whether you keep it depends on your equity, not on what the car is worth.

Equity means: what the car is worth minus what you still owe on it. If your car is worth $9,000 and you owe $8,000, your equity is $1,000 — not $9,000. Most people making car payments have very little equity, and sometimes none at all.

Florida protects:

• $5,000 of equity in one car, and
• an extra $4,000 “wildcard” you can use on almost anything — including the car — if you are not using the homestead exemption (usually because you rent, or your home has no equity).

For a renter, that is often around $9,000 of car equity protected. A married couple filing together can generally protect considerably more.

This is recent good news, and a lot of people haven’t heard it. Florida’s car exemption sat at just $1,000 from 1993 all the way until July 1, 2024, when the Legislature raised it to $5,000. If someone told you years ago that bankruptcy would cost you your car, that advice is simply out of date now.

If you still owe money on the car, you have three choices:

1. Keep it and keep paying. This is what most people do. Stay current, keep the car.
2. Redeem it. In Chapter 7, you can pay the lender a single lump sum equal to what the car is actually worth — not what you owe — and own it free and clear. This is powerful when you owe $14,000 on a car worth $7,000.
3. Give it back. If the payment is crushing you, you can surrender the car and walk away. Any remaining balance is wiped out with your other debts.

Chapter 13 adds a fourth option: a “cramdown.” If you bought the car more than 910 days (about 2.5 years) before filing, you may be able to reduce the loan balance down to the car’s real value and often lower the interest rate too.

Example. Marcus rents an apartment and owns a 2016 Honda worth $7,000, paid off — no loan on it. That means all $7,000 is equity. Because he rents, he is not using the homestead exemption, so he has $5,000 + $4,000 = $9,000 of protection available. His car is fully covered. He keeps it and wipes out $31,000 in credit cards. Under the old $1,000 exemption, that same paid-off car would have been squarely at risk.

The law behind this: Fla. Stat. § 222.25(1) ($5,000 motor vehicle exemption, raised from $1,000 by SB 158, ch. 2024-110, Laws of Fla., effective July 1, 2024); Fla. Stat. § 222.25(4) ($4,000 wildcard when the homestead exemption is not claimed); Fla. Const. art. X, § 4(a)(2) ($1,000 personal property); 11 U.S.C. § 722 (redemption); 11 U.S.C. § 524(c) (reaffirmation); 11 U.S.C. §§ 506(a) and 1325(a)(5) plus the “hanging paragraph” following § 1325(a)(9) (Chapter 13 cramdown and the 910-day rule).

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3. Can I be fired for filing for bankruptcy?

Short answer: No. It is against federal law for your employer to fire you, demote you, or cut your pay just because you filed bankruptcy.

Congress wrote a specific statute about this. It says no employer — government or private — may fire you or discriminate against you solely because you filed bankruptcy, were bankrupt, or did not pay a debt that was discharged.

There is one wrinkle worth knowing honestly. The protection is strongest for the job you already have. For hiring, government employers are barred from turning you down because of a bankruptcy — but the federal appeals court that covers Florida has held that a private company is not required to hire someone it turned down over a bankruptcy filing.

In practice, this almost never comes up, because your employer almost never finds out. The court does not call your boss. The only common situations where an employer learns anything are:

• Your wages were already being garnished, and now the garnishment has to stop.
• You file Chapter 13 and choose to have your plan payment taken out of your paycheck (many people choose to pay directly instead).

What about security clearances and licensed professions? Filing bankruptcy does not automatically cost you a clearance or a license. Investigators are usually more concerned about unresolved debt and financial pressure than about someone who dealt with it legally.

The law behind this: 11 U.S.C. § 525(a) (government employers — covers both firing and hiring); 11 U.S.C. § 525(b) (private employers — protects existing employment); Myers v. TooJay’s Management Corp., 640 F.3d 1278 (11th Cir. 2011) (§ 525(b) does not extend to a private employer’s hiring decisions).

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4. Will everyone find out?

Short answer: Almost certainly not. Bankruptcy is technically a public record, but nobody announces it, and nobody is going to stumble across it.

Let’s be specific about who actually learns:

Who gets notified: the bankruptcy court, the trustee assigned to your case, and the creditors you list. That’s it.

Who does NOT get notified: your neighbors, your family, your friends, your church, your landlord (unless you owe them money), your children’s school, or — in almost every case — your employer.

It is not published in the newspaper. Everyday consumer bankruptcies are not printed in local papers. That is an old fear left over from a different era.

The file lives on a federal court website called PACER. Anyone could look it up — but they would have to know your case exists, create an account, and pay per page to search. In 17 years of practice, the people who actually do this are creditors and debt buyers, not curious acquaintances.

Your private information is protected in the file. Court rules require that filings show only:

• the last four digits of your Social Security number,
• only the year of your birth,
• only the initials of any minor children,
• only the last four digits of financial account numbers.

And if there is something truly sensitive in your case, the judge has the power to seal it.

The law behind this: 11 U.S.C. § 107(a) (bankruptcy papers are public records); 11 U.S.C. § 107(b)–(c) (court may protect scandalous or defamatory matter and personally identifiable information); Fed. R. Bankr. P. 9037 (mandatory redaction of Social Security numbers, birth dates, minors’ names, and account numbers).

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5. How long does bankruptcy stay on my credit report?

Short answer: A Chapter 7 can be reported for up to 10 years from the filing date. A Chapter 13 can legally be reported for 10 years too — but the three big credit bureaus voluntarily remove it after 7 years.

Now here is the part nobody tells you, and it matters more than the 10-year number:

Your credit score usually starts going up, not down, within a year or two of filing.

That surprises people. Here is why it happens. Credit scores care a great deal about how much you owe compared to your limits, and whether accounts are past due. When your debts are discharged, all those balances go to zero and all those past-due accounts stop aging into worse and worse status. The bleeding stops.

Two more things worth knowing:

The individual bad accounts fall off sooner than the bankruptcy does. A charged-off credit card, a collection account, or a repossession can only be reported for 7 years from the first missed payment. Many of those will drop off your report years before the bankruptcy itself does.

Creditors must report discharged debts accurately. After your discharge, a debt included in your bankruptcy must show a zero balance and be marked as discharged. It cannot keep showing as “past due” or “charged off with a balance.” If a creditor or bureau gets this wrong, you have the right to dispute it — and if they refuse to fix it, federal law lets you sue them for damages and attorney’s fees. We handle these cases. People are often owed money and never realize it.

The law behind this: 15 U.S.C. § 1681c(a)(1) (bankruptcies reportable for 10 years from the date of entry of the order for relief); 15 U.S.C. § 1681c(a)(4) (most other adverse items limited to 7 years); 15 U.S.C. § 1681i (your right to dispute inaccurate reporting); 15 U.S.C. §§ 1681n, 1681o (damages for willful and negligent violations); 11 U.S.C. § 524(a)(2) (the discharge injunction — collecting a discharged debt is illegal).

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6. Will bankruptcy stop a wage garnishment?

Short answer: Yes — and fast. Usually the garnishment stops within a day or two of filing.

The moment your case is filed, something called the automatic stay switches on. It is automatic — no hearing, no judge’s signature, no waiting. It is a federal court order that instantly makes it illegal for creditors to:

• continue a lawsuit against you,
• enforce a judgment,
• garnish your wages,
• levy your bank account,
• or call, write, or text you about the debt.

We notify your payroll department and the garnishing creditor immediately. Your next full paycheck usually follows.

Two things that make this even better in Florida:

You may already be protected. Florida has a head of family exemption. If you provide more than half the support for a child, spouse, parent, or other dependent, then 100% of your wages up to $750 per week are exempt from garnishment for ordinary debts — unless you signed a written waiver. Many people are being garnished who never should have been. Sometimes we can stop a garnishment without filing bankruptcy at all.

You may be able to get money back. If a creditor garnished more than a certain amount from you in the 90 days before filing, that money can often be clawed back and returned to you.

The one exception: garnishments for child support and alimony continue. The automatic stay does not stop those.

The law behind this: 11 U.S.C. § 362(a)(1), (a)(2), (a)(6) (automatic stay halts lawsuits, judgment enforcement, and collection efforts); 11 U.S.C. § 362(k) (damages if a creditor willfully violates the stay); Fla. Stat. § 222.11 (head of family wage exemption); 11 U.S.C. §§ 547(b), 522(g), 522(h) (recovering preferential garnishments); 11 U.S.C. § 362(b)(2)(C) (domestic support obligations excepted).

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7. Will it stop a foreclosure?

Short answer: Yes. Filing stops a foreclosure sale — even if the sale is scheduled for tomorrow morning. We just have to file before the sale happens.

The same automatic stay that stops garnishments stops foreclosure sales. A case filed in the morning can stop a sale scheduled for that afternoon — the stay takes effect the moment the petition is filed, with no hearing and no waiting. If you are anywhere near a sale date, call today, not next week. Once the sale actually happens, the options narrow dramatically.

Stopping the sale is step one. Chapter 13 is how you keep the house.

Chapter 13 lets you take everything you are behind — missed payments, late fees, foreclosure attorney fees — and pay it back over three to five years in one affordable monthly payment, while you make your regular mortgage payment going forward. At the end, you are current and the foreclosure is gone. Your lender does not get a vote.

Florida’s bankruptcy courts also run mortgage modification mediation programs. These put you and your lender in a structured, court-supervised process to negotiate a loan modification, with real deadlines the lender has to meet. Many of our clients come out with a lower payment than they had before they fell behind.

A second mortgage or HELOC may be strippable. If your home is worth less than what you owe on the first mortgage, a Chapter 13 can sometimes remove the second mortgage entirely and treat it as ordinary unsecured debt. (This works in Chapter 13, not Chapter 7.)

One serious warning about repeat filings. If you had a bankruptcy case dismissed within the past year, the automatic stay may last only 30 days unless we ask the court to extend it. If you had two or more cases dismissed in the past year, the stay may not go into effect at all unless we ask. These motions have short deadlines. Tell your attorney about every prior case, even one you filed years ago without a lawyer.

The law behind this: 11 U.S.C. § 362(a) (automatic stay); 11 U.S.C. § 1322(b)(5) (curing default over the life of the plan); 11 U.S.C. § 1322(c)(1) (right to cure until the foreclosure sale is conducted); 11 U.S.C. §§ 506(a), 1322(b)(2) (stripping wholly unsecured junior liens in Chapter 13); Nobelman v. American Savings Bank, 508 U.S. 324 (1993); Bank of America, N.A. v. Caulkett, 575 U.S. 790 (2015) (no lien stripping in Chapter 7); 11 U.S.C. § 362(c)(3), (c)(4) (limits on the stay after prior dismissed cases).

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8. Can student loans be discharged?

Short answer: Yes, sometimes — and the odds got dramatically better in November 2022. It is not automatic. It takes a separate step, and it is worth asking about.

For decades, lawyers told people student loans were impossible. That advice is now out of date.

Here is how it works. Student loans are not wiped out just by filing. To discharge them, we file a separate mini-lawsuit inside your bankruptcy case, called an adversary proceeding, and we prove that repaying the loans would be an “undue hardship.”

In Florida, courts use a three-part test:

1. Based on your current income and expenses, you cannot maintain a minimal standard of living and still repay the loans.
2. This situation is likely to continue for a significant part of the repayment period.
3. You have made good-faith efforts to repay.

What changed in 2022. The Department of Justice issued new guidance telling government lawyers to stop fighting cases that meet those conditions. Borrowers now complete a detailed attestation form about their income, expenses, age, health, and repayment history. When the government agrees the standard is met, it stipulates to the facts and recommends discharge to the judge. Cases that once took years of litigation now often resolve by agreement. That guidance remains in effect.

A second path people miss entirely. Some debts that look like student loans are not legally protected at all — and can be wiped out like any credit card. Examples courts have found include:

• private loans that exceeded the school’s actual cost of attendance,
• loans for schools not eligible for federal aid (some coding bootcamps, trade programs, flight schools),
• bar exam study loans and residency relocation loans.

If you have private “student” debt, it is genuinely worth having a lawyer read the loan documents.

A note for 2026: federal repayment plans are changing, with income-driven plans being replaced by a new Repayment Assistance Plan. Long, documented participation in a repayment plan can help show good faith later. Don’t assume your history hurts you — it may be your best evidence.

The law behind this: 11 U.S.C. § 523(a)(8) (student loan exception and the “undue hardship” standard); Fed. R. Bankr. P. 7001(6) (adversary proceeding required); Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir. 1987), adopted in the Eleventh Circuit in Hemar Insurance Corp. of America v. Cox (In re Cox), 338 F.3d 1238 (11th Cir. 2003); United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (court must make an independent undue-hardship finding); DOJ/Department of Education Guidance for Department Attorneys Regarding Student Loan Bankruptcy Litigation (Nov. 17, 2022); Homaidan v. Sallie Mae, Inc., 3 F.4th 595 (2d Cir. 2021) and McDaniel v. Navient Solutions, LLC, 973 F.3d 1083 (10th Cir. 2020) (persuasive authority that some private education debt falls outside § 523(a)(8)).

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9. What does bankruptcy cost?

Short answer: The court’s filing fee is $338 for Chapter 7 and $313 for Chapter 13. Attorney fees are separate and vary by case — and in Chapter 13, most of the attorney fee is usually paid through your plan, not upfront.

Here is every piece of the cost, honestly:

Item	Chapter 7	Chapter 13
Court filing fee	$338	$313
Credit counseling course (before filing)	about $10–$50	about $10–$50
Financial management course (after filing)	about $10–$50	about $10–$50
Attorney fee	flat fee — see What Bankruptcy Costs	flat fee, mostly paid through the plan

If money is the reason you haven’t called, please read this part.

For clients who qualify, we do not collect attorney’s fees before we file your Chapter 7 case. No retainer, no deposit. We file first. How this works. The people who most need to file are almost always the people with the least available cash, and asking for thousands of dollars up front from someone in that position isn’t a fee arrangement — it’s a locked door.

The Chapter 7 filing fee can be waived entirely if your household income is below 150% of the federal poverty guidelines. There is a form for it.

If you don’t qualify for a waiver, you can pay the court in installments — up to four payments over 120 days.

Both required courses waive or reduce their fees for low-income filers. By law, the counseling agencies must serve you regardless of your ability to pay. Just ask them.

And in Chapter 13, the economics flip. Because a Chapter 13 case runs for years, most of the attorney fee gets built into your monthly plan payment rather than collected before filing. Many people start a Chapter 13 having paid very little out of pocket — which is exactly why Chapter 13 is often the right answer for someone facing foreclosure who has no savings left.

One thing to be careful about: be wary of anyone who is not a licensed attorney offering to “handle your bankruptcy” or “stop your foreclosure” for a fee. Federal law tightly restricts what non-lawyer petition preparers may do and what they may charge, and they cannot give you legal advice.

The law behind this: 28 U.S.C. § 1930(a) and the Judicial Conference Bankruptcy Court Miscellaneous Fee Schedule (current filing fees); 28 U.S.C. § 1930(f) and Official Form 103B (Chapter 7 fee waiver at or below 150% of poverty guidelines); Fed. R. Bankr. P. 1006(b) and Official Form 103A (installment payments); 11 U.S.C. § 109(h) (pre-filing credit counseling); 11 U.S.C. §§ 727(a)(11), 1328(g) (post-filing debtor education); 11 U.S.C. § 1326(b)(1) (attorney fees paid through the Chapter 13 plan); 11 U.S.C. § 110 (limits on bankruptcy petition preparers).

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10. How long does bankruptcy take?

Short answer: Chapter 7 usually takes about three to four months from filing to discharge. Chapter 13 runs three or five years. But the relief — the part you actually feel — starts on day one.

That last sentence matters more than the rest. The phone calls stop the day you file. The garnishment stops the day you file. The foreclosure sale stops the day you file. You do not wait months for that.

Chapter 7 timeline:

When	What happens
Day 0	We file. Automatic stay begins. Collection stops.
Day 21–40	Your meeting of creditors (about 5–10 minutes, by Zoom).
Within 60 days after	You complete the short financial management course online.
About day 90–120	Discharge order. Your debts are legally gone.

Chapter 13 timeline:

• Your plan lasts 3 years if your household income is below the Florida median for your family size, or 5 years if it is above.
• You make one monthly payment to the trustee, who distributes it.
• When you finish the plan, you receive your discharge.

Why would anyone choose 5 years? Because Chapter 13 does things Chapter 7 cannot: save a house from foreclosure, catch up on a car, protect a co-signer, handle recent tax debt, or protect property you have too much equity in. It is a repair tool, not a punishment.

The law behind this: Fed. R. Bankr. P. 2003(a) (meeting of creditors held 21–40 days after the order for relief); Fed. R. Bankr. P. 4004(a), (c) (objection deadline and timing of discharge); 11 U.S.C. § 727 (Chapter 7 discharge); 11 U.S.C. § 1325(b)(4) (3-year vs. 5-year applicable commitment period); 11 U.S.C. § 1328(a) (Chapter 13 discharge on completion of plan payments).

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11. Do I have to go to court?

Short answer: You have to attend one meeting. It is not a courtroom, there is no judge, and in Florida it is held over Zoom. Most people are done in under ten minutes.

The meeting is called the meeting of creditors, or the 341 meeting (named after the section of the law that requires it). Here is what it is really like:

• It is run by the trustee — an administrator, not a judge.
• It takes place by Zoom or telephone. You do not travel to a federal courthouse.
• You show ID and proof of your Social Security number.
• You answer basic questions under oath: Did you read your paperwork? Is it true and complete? Did you list everything you own and everyone you owe?
• Creditors are invited but almost never show up. In routine consumer cases, it is usually just you, your attorney, and the trustee.
• We prepare you beforehand, and your attorney is on the call with you the entire time.

When would you ever see an actual judge? Only if something is contested — for example, if a creditor files a motion you want to fight, if someone objects to your discharge, or if we are litigating a student loan discharge or a case against a creditor who broke the law. Even then, your attorney handles most hearings without you.

The overwhelming majority of our clients never set foot in a courtroom.

The law behind this: 11 U.S.C. § 341 (meeting of creditors; a judge may not preside or attend); 11 U.S.C. § 343 (the debtor must appear and submit to examination under oath); Fed. R. Bankr. P. 2003 (trustee presides); the U.S. Trustee Program conducts § 341 meetings for Chapter 7 and Chapter 13 consumer cases by video.

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12. Should I use my retirement savings to pay off debt instead?

Short answer: Please do not do this before you talk to a lawyer. Cashing out retirement to pay debts you could legally discharge is the single most expensive mistake we see — and we see it constantly.

Here is the part almost nobody knows:

Your retirement account is already protected. 401(k)s, 403(b)s, pensions, IRAs, Roth IRAs, teacher and police and firefighter retirement plans — these are shielded from creditors and from the bankruptcy trustee. A creditor cannot reach them. A bankruptcy trustee cannot liquidate them. They are, in a very real sense, the safest money you own.

But the protection ends the moment you take the money out.

So look at what happens when someone withdraws $40,000 from a 401(k) to pay credit cards:

• They lose roughly 10–35% to income taxes, depending on their bracket.
• They lose another 10% to an early withdrawal penalty if they are under 59½.
• The $40,000 might net them $24,000 to actually pay creditors.
• They pay down debt — but they were still short every month, so the balances creep back.
• Eight months later they file bankruptcy anyway. Now the debt is gone and so is the retirement.

Had they filed first, the debt would have been discharged and the entire $40,000 would still be sitting there, untouched, protected, still growing.

We have had this conversation with people in their fifties who wiped out twenty years of savings to buy a few months of breathing room. It is heartbreaking, and it is preventable with one phone call.

The same logic applies to: taking a hardship withdrawal, taking a second mortgage or HELOC to pay off credit cards (you would be converting debt that can be erased into debt secured by your house), borrowing from family, or paying a debt settlement company for years.

One Florida-specific bright spot: inherited IRAs — money you inherited from someone else’s retirement account — are not protected under federal bankruptcy law, but Florida law does protect them. That is a meaningful advantage of filing here, and it is exactly the kind of detail that gets missed without an attorney.

Before you touch retirement money, ask one question: Is the debt I’m about to pay a debt I could legally erase? If it is credit cards, medical bills, personal loans, repossession deficiencies, or old judgments — the answer is very often yes.

The law behind this: 11 U.S.C. § 541(c)(2) (ERISA-qualified plans are excluded from the bankruptcy estate); Patterson v. Shumate, 504 U.S. 753 (1992); 11 U.S.C. §§ 522(b)(3)(C), 522(d)(12) (retirement funds in tax-exempt accounts are exempt for all debtors, including in opt-out states like Florida); 11 U.S.C. § 522(n) (IRA cap of $1,711,975 for cases filed April 1, 2025 through March 31, 2028; amounts rolled over from employer plans do not count toward the cap); Fla. Stat. § 222.21 (Florida exemption for pensions, IRAs, and other retirement accounts); Fla. Stat. § 222.21(2)(c) (Florida protects inherited retirement accounts); Clark v. Rameker, 573 U.S. 122 (2014) (inherited IRAs are not “retirement funds” under federal exemption law); I.R.C. § 72(t) (10% additional tax on early distributions).

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The bigger picture

Read those twelve answers again and notice the pattern. The house is protected. The car is protected. The retirement is protected. The job is protected. The privacy is mostly protected. The garnishment stops. The foreclosure stops.

Bankruptcy is not about losing things. For most people, it is about keeping things — and finally getting out from under debt that was never going to be paid off no matter how many years you tried.

If you have been lying awake doing math that never works, you are not failing. The math genuinely does not work. That is information, not a verdict on your character.

Talk to us

The consultation is free, and there is no obligation. Bring your questions, your worries, and your list of debts — or bring nothing at all and just talk. We will tell you honestly whether bankruptcy is the right tool for you, and if it isn’t, we will tell you that too.

Debt Relief Legal Group — (813) 231-2088 — aborden@1800debtrelief.com — 14502 N Dale Mabry Hwy Ste 200, Office 304-5, Tampa, FL 33618

Serving consumer bankruptcy clients throughout Florida.

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About this article

Written by Alan Dexter Borden, a Florida consumer bankruptcy attorney with 17 years of experience in Chapter 7 and Chapter 13 cases, student loan discharge, and consumer protection litigation under the Fair Debt Collection Practices Act and Florida Consumer Collection Practices Act.

Last reviewed: 29 July 2026

This article is general legal information about Florida and federal bankruptcy law, not legal advice about your situation. Every case is different, and the details matter. Dollar amounts set by federal law adjust every three years; the figures here reflect amounts in effect for cases filed between April 1, 2025 and March 31, 2028. Reading this article does not create an attorney-client relationship. Please speak with a licensed bankruptcy attorney before making any decision.