Will I Lose My House and Car in Chapter 7 Bankruptcy? Florida 2026 Guide

For most people considering bankruptcy, the biggest fear isn’t the credit score—it’s losing the things they’ve worked so hard for. The idea that filing for Chapter 7 means the government will pull up with a moving truck and take everything you own is a persistent myth.

The reality is that Florida has some of the strongest asset protection laws (exemptions) in the United States. At Juan Burgos Law, the vast majority of our Chapter 7 clients keep their home, their car, their retirement savings, and their furniture, all while wiping out their credit card and medical debt.

Can I Keep My House? (The Homestead Exemption)

Yes, in most cases. The Florida Constitution provides an almost unlimited protection for your primary residence, known as the Homestead Exemption. It protects 100% of the equity in your home, regardless of its value, as long as you meet these requirements:

• Primary Residence: It must be the home where you live (not a vacation home or investment property).
• Residency Requirement: You must have owned the property in Florida for at least 1,215 days (about 3.5 years) before filing to get the full, unlimited protection. If you bought it more recently, the exemption is capped (currently around $189,050, subject to inflation adjustment).
• Lot Size: The protection covers up to half an acre (0.5 acre) within a municipality, or up to 160 acres outside a municipality.

What Happens to My Car? (2026 Update)

This is the second most common question. Florida law recently increased the protection for motor vehicles, making Chapter 7 safer for car owners.

1. If Your Car is Paid Off

You can now protect up to $5,000 of equity in a single motor vehicle (or $10,000 for a married couple filing jointly). Previously, this limit was only $1,000.

If your car is worth more than the exemption limit, we can often use the “Wildcard Exemption” (up to an additional $4,000 if you don’t use the homestead exemption) to cover the difference.

2. If You Are Still Paying for the Car

If you have a loan, the Trustee is only interested in the equity (the car’s value minus what you owe). Since most financed cars are worth less than the loan balance (“underwater”), the Trustee has no reason to take them.

To keep the car, you generally have two options:

• Reaffirmation Agreement: You sign a new contract promising to keep paying the loan as if the bankruptcy never happened.
• “Ride-Through”: In some cases, you can simply keep making payments without signing a new contract, keeping the car as long as you stay current (though this depends on the lender).

The “Wildcard” Exemption: Your Secret Weapon

If you do not own a home (or choose not to protect it), Florida offers a “Wildcard” exemption of up to $4,000 per person. You can use this allowance to protect any asset you choose: cash in the bank, a second vehicle, a tax refund, or expensive work equipment.

Conclusion: Don’t Guess with Your Assets

The goal of Chapter 7 is to give you a “Fresh Start,” not to leave you destitute. With careful planning before we file, we can legally protect almost all of your assets.

At Juan Burgos Law, we review your assets for free before you sign anything. If we see a risk of losing a specific property, we will tell you honestly and explore Chapter 13 as a safer alternative.