Why Are Bankruptcy Filings Rising in Florida?
A Central Florida Guide to Chapter 7, Chapter 13, and What You Can Keep
By Attorney Juan C. Burgos, Esq. | Florida Bar No. 84056 | Serving Orange, Osceola, Seminole & Polk Counties
The short version: If it feels like the financial walls are closing in, the numbers say you're not imagining it. Bankruptcy filings in the Middle District of Florida — which covers Orlando, Tampa, and Jacksonville — rose roughly 27% over a recent 12-month period, one of the sharpest increases of any federal district in the country. It isn't because people are being irresponsible. It's because the cost of living in Florida changed faster than most households' budgets could adjust, and bankruptcy is the tool built for exactly that gap.
At Juan Burgos Law, we'd rather you work from real numbers than fear. This guide breaks down what's actually driving the increase, how Chapter 7 and Chapter 13 differ, and what Florida law lets you protect along the way.
What's Actually Driving the Increase
Three things show up again and again in the cases that come through our office:
1. The Insurance and Housing Squeeze
Florida has some of the highest housing-driven cost pressure in the country. Most of our clients aren't filing because of one big mistake — they're filing to free up cash flow from credit card payments so they can actually cover rent, a mortgage, and a homeowners insurance premium that may have doubled or tripled in the same month.
2. Credit Card Interest Rates
Average credit card rates have stayed well above 20% according to Federal Reserve consumer credit data. At those rates, a $10,000 balance paid at the minimum can take well over a decade to clear, with most of each payment going to interest instead of principal. Bankruptcy cuts that cord immediately instead of letting it drag on for years.
3. Faster, More Aggressive Collections
We're seeing creditors move faster to sue and garnish wages than they used to. Filing stops all of that immediately through the Automatic Stay — lawsuits, collection calls, and garnishments have to stop the day the case is filed.
Chapter 7 vs. Chapter 13: What People Are Actually Choosing
Chapter 7: The Fresh Start
Chapter 7 remains the dominant choice by a wide margin — roughly three-quarters of individual filings in this district — because it discharges unsecured debt completely, usually within 4 to 6 months. It's the option people mean when they talk about a clean break.
Chapter 13: Protecting What You've Built
Chapter 13 has been climbing too, mostly among homeowners. The reason is usually the same: people locked in a low mortgage rate a few years back and are desperate to keep that rate rather than lose the home to foreclosure and have to borrow again at today's rates.
Do You Qualify? The Means Test
To qualify for Chapter 7, your household income generally needs to fall under the Florida median for your household size. These thresholds get adjusted periodically, so rather than list numbers here that could already be out of date by the time you're reading this, use our free Means Test Calculator for the current figures.
Earning more than the threshold? Don't assume that disqualifies you. We can often still qualify higher earners for Chapter 7 by properly deducting allowable expenses — childcare, health insurance, and secured debt payments among them.
Asset Protection in Florida
Florida continues to offer some of the strongest debtor protections in the country:
- Motor vehicles: up to $5,000 in equity protected per vehicle ($10,000 if married and jointly owned) — a significant increase from the old $1,000 limit that applied before July 1, 2024.
- Homestead: generally 100% of your primary home's equity is protected once you've owned it for at least 1,215 days (about 40 months). Own it for less time, and a federal cap applies — currently $214,000, adjusted for inflation every three years. See our full homestead and vehicle exemption guide for the details.
- Wage garnishment: Head-of-household wages remain fully exempt from most consumer creditors under Florida Statute § 222.11.
Frequently Asked Questions
Why are so many people filing for bankruptcy in Florida right now?
The main drivers we see are rising homeowners insurance and housing costs squeezing monthly budgets, credit card interest rates that make revolving debt nearly impossible to pay down, and creditors moving faster to sue or garnish wages. Bankruptcy filings in the Middle District of Florida have risen roughly 27% over a recent 12-month period as a result.
Is bankruptcy a sign of financial failure?
No. Bankruptcy is a mainstream financial tool used by neighbors, coworkers, and local business owners adjusting to what things actually cost in Florida right now. Filing isn't a personal failure — it's the system Congress built, working the way it's supposed to.
Should I file Chapter 7 or Chapter 13?
It depends mainly on your income and what you're trying to protect. Chapter 7 is faster and wipes out unsecured debt in months, but doesn't help you catch up on a mortgage or car loan you're behind on. Chapter 13 lets you cure that kind of default over three to five years while keeping the asset. We walk through both options during a free consultation.
Check Your Eligibility
Free, honest financial analysis — no pressure, just a real answer about whether full debt elimination fits your situation. We serve Orange, Osceola, and Seminole counties.
Want the details on a specific situation? See how bankruptcy interacts with an eviction, whether it can protect a tax refund, or try the debt snowball calculator to see what paying it off on your own would look like first.
Legal Notice: Filing data referenced above comes from the U.S. Bankruptcy Court for the Middle District of Florida and Federal Reserve consumer credit statistics. Figures and exemption amounts are adjusted periodically and can change. This page is for general educational purposes and does not create an attorney-client relationship or substitute for individual legal advice. Every situation is different, and results depend on the specific facts involved.
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