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Florida Debtors' Rights

If you fail to pay to a person or company you owe, they may file a lawsuit against you to collect the debt. If a court finds against you in the lawsuit, a judge can enter judgment, making you a “judgment debtor.” While you can't go to jail for failing to pay a judgment, the debt can be reported to the credit bureau and made a part of your credit history for up to seven years. It is also possible some of your income, property, and other assets can be seized to repay the debt. This article can provide an overview of your right to claim certain exemptions regarding your home, personal property, and wages to prevent them from being seized after a judgment.

Can the Court or a Creditor Take My Home?

If you own the home you live in, it is safe from all creditors except for those that have a mortgage or lien on the home. These would generally be people or companies that loaned you money to purchase the home. If you live in an incorporated area like a planned community or subdivision, you can exempt your home and up to one-half acre of land from any forced sale. If you live in an unincorporated area, you can exempt the home and up to 160 acres as a “homestead property.” This is known as the homestead protection law. To qualify for the homestead exemption, you can file a Notice of Homestead with the court that describes your home and surrounding land and claims it as your homestead.

What about My Personal Property?

If you do not qualify for or claim the homestead exemption, you still have the right to claim a personal property exemption for up to $4,000 per person. The same limitations apply, however: you can’t exempt the property from a creditor who has a lien or security interest in the property. For example, if you took out a loan to buy a car, you cannot exempt the car from the lender, if they are the creditor.

A separate exemption exists for up to $1,000 of the value of your vehicle under Florida law. Unless the value of the car is greater than $1,000, it cannot be seized to repay a debt. However, you are allowed to combine the vehicle exemption and the personal property exemption. For example, you may be able to claim a total exemption of $5,000 for your vehicle. It is important to note that the personal property exemption does not apply to any child support or spousal support debts you may owe.

Can the Court or a Creditor Seize Jointly Owned Property?

If there is a judgment only against your spouse and not yourself, you are entitled to claim an exemption your interest in the property. Under Florida law, property that is held by a husband and wife is called “tenancy by the entirety,” which means it cannot be divided to repay debts. Therefore, jointly held marital property, including real estate, is exempt from creditors of the husband or the wife, individually. In order to obtain the exemption and protect the joint property, you or your spouse must file an affidavit with the court. Florida law is clear, however, that fraudulent transfers of property or transfers made only to protect the property from creditors may cause the property to lose its exemption.

Can the Court Garnish My Wages?

The short answer is yes, with a few exceptions. Under Florida law, there is a “head of family” exemption. If you make $500 or less per week in net income, and you are the head of a family, those wages can be exempt. To qualify as a head of family, you must provide more than one-half of the support for a child or other person. Like the other exemptions, you must file an affidavit with the court to declare your head of family status and make your wages exempt from being garnished. Federal law also limits wage garnishment to 25% of your net wages, or the amount you take home that is more than 30 times the federal minimum wage per week, whichever is less.

Other types of income are generally exempt from garnishment, including

  • Social Security benefits;
  • Workers compensation;
  • Unemployment benefits;
  • Disability benefits;
  • Veteran's benefits;
  • Pensions;
  • 401K plans;
  • Life insurance proceeds;
  • College and medical savings accounts; and
  • Earned income credits from your taxes are also exempt from collection.

Like the joint property exemption, you must file an affidavit claiming income exemptions, and the creditor may challenge the claim.

More Resources

The intersection of debt, bankruptcy, and real estate law can be especially difficult to navigate. You might find it helpful to consult with an experienced debt attorney in Florida. You can also visit FindLaw’s sections on Florida property and real estate law and bankruptcy and debt for more general information.

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