Under The 730-Day Rule: What Recent Movers Should Know Before Filing For Bankruptcy In Florida

In this article, you will discover:

• How the 730-day rule affects Florida Bankruptcy filers.
• Unique exemptions Florida offers that other states do not.
• Whether it’s better to wait to file for bankruptcy until you qualify for Florida’s exemptions.

What Is The 730-Day Residency Rule In Bankruptcy, And How Does It Affect Florida Filers?

The 730-day rule states that you can file for bankruptcy in the state where you live after being there for the better part of 180 days. In other words, once you’ve lived there for more than three months, you can file in that state.

However, you’re not yet able to claim that state’s exemptions. If you’ve lived in the state for 730 days (two years), that can affect some cases for better or worse.

For instance, if you moved from another state and bought land and a house in Florida, you probably want to wait 730 days (two years). Florida has a homestead exemption, and you won’t qualify for that exemption until you’ve been here for 730 days.

In the alternative, suppose you have a car with $13,000 of equity, and you came from a state with generous motor vehicle exemptions, or maybe a federal exemption with a significant wildcard. If you file that case under your prior state’s exemption, before you were in Florida for two years, you can protect your car. By contrast, if you file your case once you have Florida exemptions involved, the maximum protection is $9,000 of equity, and that depends on the circumstances.

The 730-day rule can help some people, but not others. Unless you’re a property owner with equity in your home, Florida otherwise doesn’t have the most generous bankruptcy exemptions.

Sometimes it benefits you if you’ve come from a different state with better exemptions. Other times, you need the exemptions that Florida provides, too. If you need the exemptions that Florida provides, you’ll have to reside here for two years before you can actualize those exemptions and use them.

Can I Still File For Bankruptcy In Florida If I Recently Moved From Another State?

As long as you’ve been here the majority of the past 180 days, you can file bankruptcy in Florida.

What Exemptions Does Florida Offer That Other States Do Not, Especially For Homes And Personal Property?

The only exemption Florida offers that’s better than others is its homestead exemption. If you’ve owned and lived in your main homestead for three years and four months (40 months), you can exempt all the equity in that home. To qualify, you must live in the home, and it can’t be your investment property or a second property.

If you’ve lived in the home for less than 40 months, you’re subject to a different exemption amount that’s still relatively friendly. For most people, if they buy a home, they’re not going to have $150,000 to $200,000 in equity right away. Florida’s homestead exemption, which is not fully realized, is between $150,000 and $175,000.

Is It Better To Wait To File Until I Fully Qualify For Florida’s Bankruptcy Exemption Laws?

When to file for bankruptcy with respect to exemptions is a matter of circumstance. Unless you come from another state like Florida with similar, lesser exemptions, you are likely to benefit from the exemptions in your prior state.

Many people who haven’t lived in Florida for a full two years, whether they’re from New York, Pennsylvania or California, have assets that would not be protected under normal circumstances in Florida. However, because they haven’t been here for two years, they can use their prior state’s better exemptions. Some states even allow you to take the federal exemptions, while Florida does not.

Overall, if you don’t have property in Florida right away, the other exemptions won’t improve your situation most of the time.

Attorney Alec Solomita is a skilled lawyer based in Orlando, Florida, who has helped clients like you navigate the intricacies of bankruptcy law. With years of experience, he is prepared to assist you with understanding and taking advantage of Florida’s 730-day rule so you can maximize your Florida and out-of-state exemptions.

Still have questions? Ready to get started? Contact Solomita Law today to schedule an initial consultation.

How Can A Bankruptcy Attorney Help Me Plan The Best Filing Date Under The 730-Day Rule?

The benefit is simple. Filing bankruptcy in Florida without understanding exemptions will land you in a lot of trouble. Also, if you don’t understand the timeline and file your bankruptcy just one day late, a trustee may notice, and suddenly an asset you thought was protected may not be.

Suppose you own a car outright that’s worth $15,000. You may come from a state that allows you to exempt that car 100%. If you file your case when you’ve been here less than two years, that car will be completely safe.

However, if you wait two years and a day to file your case, you’re now under the jurisdiction of the Florida bankruptcy exemptions, which only allow you to exempt $5,000 for a motor vehicle. If you don’t own any real estate, there’s another $4,000 exemption on the wildcard.

Instead of saving 15,000, you’re only going to save $9,000 and owe the court $6,000. If you can’t pay that $6,000, you lose your car.

You could have avoided that situation by speaking with an attorney. They would ask you how long you’ve been in Florida, because that detail will affect certain cases. If you’ve been here less than two years, some loopholes work in your favor to keep assets that you usually couldn’t keep in this state.

Would A Bankruptcy Trustee Actually Penalize Me If My Filing Was A Day Or So Later Or Earlier?

Yes, but the penalty is not petty; it’s statutory. You’re required to list your last three years of addresses in your Statement of Financial Affairs.

If you moved here on December 7, 2023, and now you’re filing bankruptcy on December 8, 2025, you must use Florida’s exemptions. You no longer qualify for your previous state’s exemptions. It may seem petty because you’re filing only a day late, but that’s how numbers work. It’s a fair deadline that any qualified attorney would be fully aware of.

You’re lucky to have that two-year grace period. Even though some people may be tempted to shop for exemptions, the rule is so clear that it’s difficult to do so.

Suppose somebody willfully files a Chapter 7 sooner than eight years after receiving a discharge. They don’t receive the discharge, and they can’t file again for another 8 years. It’s a tough decision, but these rules aren’t complicated if you look at the dates. The situation is black and white.

If you’re representing yourself, you may not know or understand these rules without doing research. That’s why speaking with a bankruptcy attorney is essential.

Notes From The Field: Have You Worked With Someone Who Moved To Florida For A “Fresh Start,” Only To Learn The Exemption Timeline Impacted Their Plan?

I’ve worked with people who moved here seeking a fresh start. Sometimes, they had an asset that they hadn’t really thought about.

It’s rare for someone who moved to Florida within the last two years for a fresh start to have their bankruptcy case be negatively impacted unless they own property out of state. Often, people own property in the state from which they came. They’re trying to make it in Florida and, in so doing, use that other property as an investment. Unfortunately, they can’t keep that property. I can’t protect it.

If you’ve recently moved to Florida, it’s a matter of how long you’ve been here. Once you’ve been here for over three months, I can work with you.

The next question is: Are there any assets? Most of the time, you’re not losing much by not utilizing Florida’s bankruptcy exemptions. It’s almost a treat for me as an attorney to use another state’s exemptions, because I can protect assets I usually can’t.

Still Have Questions? Ready To Get Started?

For more information on Florida bankruptcy’s 730-day rule, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 255-7458 today.