What Happens to My Home If I File for Bankruptcy in Florida?
August 8, 2025
What Happens to My Home If I File for Bankruptcy in Florida?
Filing for bankruptcy is a major financial decision, and many Florida homeowners understandably fear it means losing their homes. Fortunately, that’s not always the case. At the Law Office of Paul L. Urich, P.A., we help individuals in Orlando navigate bankruptcy while protecting what matters most—including their homes.
Florida’s Homestead Exemption: Strong Protection for Homeowners
Florida offers one of the most generous homestead exemptions in the country. If your home qualifies as your primary residence, you may be able to fully protect it from creditors during bankruptcy, regardless of its value.
To claim this exemption, you typically must:
- Own the home and have it designated as your primary residence
- Have lived in the home for at least 1,215 days prior to filing
- Ensure the home is within a half-acre in a municipality or up to 160 acres outside a municipality
If you meet these criteria, your home may be exempt from liquidation in a Chapter 7 bankruptcy.
Chapter 7 vs. Chapter 13: What’s the Difference for Your Home?
- Chapter 7 Bankruptcy: This is also known as liquidation bankruptcy. If your home has significant equity beyond the exemption amount, the trustee may sell it to pay creditors. However, if the equity is protected by the homestead exemption, you can likely keep your home—as long as you are current on your mortgage.
- Chapter 13 Bankruptcy: This option allows you to reorganize your debts through a court-approved repayment plan. If you’re behind on mortgage payments, Chapter 13 may help you catch up over time and avoid foreclosure while still keeping your home.
What If You’re Behind on Mortgage Payments?
Falling behind on your mortgage doesn’t automatically mean you’ll lose your home in bankruptcy. Chapter 13 is often the better option for those seeking to retain property while managing past-due balances. As long as you can make ongoing payments and meet the terms of your plan, your lender cannot foreclose during bankruptcy proceedings.
Will Bankruptcy Eliminate My Mortgage?
No. Bankruptcy may eliminate your personal liability for the mortgage debt, but it does not remove the lender’s lien on your home. If you stop making payments after bankruptcy, the lender can still foreclose.
Speak with a Bankruptcy Attorney in Orlando
Your home is likely your most important asset, and bankruptcy doesn’t always mean you’ll lose it. With the right strategy and legal guidance, many Florida residents are able to protect their homes while getting relief from overwhelming debt.
At the Law Office of Paul L. Urich, P.A., we help clients throughout Orlando understand their options and build a plan that protects their property and future. If you're considering bankruptcy, contact us today for a confidential consultation.
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Filing bankruptcy involves several steps. While these steps are not specifically part of the bankruptcy filing, consumer credit courses are still required before the debt is fully discharged. Pre-filing credit counseling Before you can file for bankruptcy, you must complete this course. It aims to help you understand your financial situation and explore alternatives to bankruptcy. It must be taken from an approved agency, and you need to complete it within 180 days before filing. The course typically lasts about 60 to 90 minutes and can be done online, over the phone, or in person. During the course, a credit counselor will review your income, expenses and debts. They will help you create a budget and discuss possible options for managing your debt. If bankruptcy is the best option, the counselor will provide a certificate of completion, which you must include with your bankruptcy filing. Filing for bankruptcy Once you have completed the pre-filing credit counseling course and received your certificate, you can proceed with filing for bankruptcy. It involves submitting a petition to the bankruptcy court and various forms detailing your financial situation, assets, and debts. Post-filing debtor education After filing for bankruptcy, you must complete a debtor education course before your debts can be discharged. This course focuses on financial management and aims to help you avoid future financial problems. It covers topics such as budgeting, saving and using credit wisely. The debtor education course is also provided by approved agencies and usually lasts about two hours. Like the credit counseling course, it can be taken online, over the phone, or in person. You will receive a certificate upon completion, which you must file with the court to obtain your bankruptcy discharge. Importance of compliance It’s crucial to complete both the pre-filing credit counseling and post-filing debtor education courses. Failure to do so can result in dismissing your bankruptcy case, which means your debts are not discharged. These courses aim to ensure that you fully understand your financial situation and have the tools to manage your finances better in the future. A bankruptcy attorney can help with these other requirements Consumer credit counseling courses are a mandatory part of the bankruptcy process and serve an essential purpose. They help you assess your financial situation, explore alternatives to bankruptcy and learn how to manage your finances effectively. Completing these courses is essential for a successful bankruptcy filing and a fresh financial start.
When you’re overwhelmed by debt, bankruptcy may be your best option for a fresh start. In Florida, you must complete credit counseling before and after filing for bankruptcy. Pre-filing counseling helps you evaluate your financial situation and explore alternatives to bankruptcy. After filing, you must complete a debtor education course to have your debts discharged. These requirements ensure you’re making an informed decision and gaining financial management skills. Pre-bankruptcy counseling Pre-bankruptcy credit counseling involves a thorough review of your personal finances and a discussion about all available debt relief options, including bankruptcy. During this session, which typically lasts about an hour, you’ll work on creating a personalized budget plan. You can complete counseling in person, online or over the phone. Counselors charge around $50 on average but may reduce or waive fees based on your financial situation. After completing the course, you’ll receive a certificate that you must file with your bankruptcy petition within 180 days. Post-bankruptcy filing counseling After filing for bankruptcy, you must complete a debtor education course. This two-hour class covers budgeting, responsible credit use and money management. Like pre-filing counseling, you can complete this step in person, online or by phone. Counselors charge $50 to $100 but offer fee reductions based on your income. You must submit the completion certificate to the court before it will discharge your debts. Some people think you don’t need this step. However, if you fail to complete this course, the court can close your case without discharging your debts. You will then need to pay additional court costs and attorney fees to reopen your case. An experienced consumer credit counseling attorney can guide you through these requirements. They can help you find approved nonprofit counseling agencies and ensure you meet all necessary steps in the bankruptcy process. Working with a skilled and compassionate lawyer can lessen the complexities of bankruptcy law and help set you on a solid financial footing for the future.