Florida residents can file one of four types of bankruptcy under federal law: Chapter 7 for quick liquidation of debts, Chapter 13 for a court-supervised repayment plan, Chapter 11 for business reorganization, and Chapter 12 for family farmers and commercial fishermen. Each type of bankruptcy in Florida works differently, and the right one depends on your income, how much you owe, whether you want to keep property you’re behind on, and whether you’re filing for yourself or a business. Florida follows federal bankruptcy rules but layers on its own property exemptions, including one of the strongest homestead protections in the country.
Chapter 7: Wiping Out Debts Through Liquidation
Chapter 7 is the most common filing for individuals. A court-appointed trustee is authorized to collect your non-exempt property, sell it, and distribute the proceeds to creditors in a legally set order. In practice, most Chapter 7 cases in Florida are “no-asset” cases: everything the debtor owns is covered by exemptions, so the trustee has nothing to sell. Cases usually close in three to four months.1United States Courts. Chapter 7 – Bankruptcy Basics
Qualifying means passing a means test that compares your household income to Florida’s median for a family your size. For cases filed on or after April 1, 2026, the median figures are $69,876 for one earner, $86,523 for two, $97,540 for three, and $114,761 for four.2U.S. Trustee Program. Census Bureau Median Family Income By Family Size Below the median, you qualify automatically. Above it, you can still pass by deducting certain allowed expenses in a second calculation; if disposable income is still too high, the court will presume the filing is abusive and steer you toward Chapter 13.3United States Department of Justice. U.S. Trustee Program – Means Testing
At the end of the case, the court discharges most unsecured debts—credit cards, medical bills, personal loans. The discharge is a permanent court order that bars creditors from ever pursuing those debts again.
Chapter 13: Keeping Property While Catching Up
Chapter 13 is built for people with regular income who want to hang on to property while paying off arrears through a court-approved plan lasting three to five years. It’s often the better choice if you’re behind on a mortgage or car loan, because the plan lets you cure the past-due amount over time instead of surrendering the collateral.4United States Courts. Chapter 13 Bankruptcy Basics
Eligibility depends on how much you owe. Unsecured debts must be below $526,700 and secured debts below $1,580,125.5Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor Exceed those limits and Chapter 11 becomes the alternative.
Some debts get priority treatment in a Chapter 13 plan and must be paid in full before general unsecured creditors receive anything. Child support and alimony sit at the top, followed by administrative costs of the case, certain tax debts, and unpaid employee wage claims.6Office of the Law Revision Counsel. 11 U.S. Code 507 – Priorities Complete every payment on schedule and the court discharges the remaining eligible unsecured balances.
Chapter 11: Reorganizing a Business
Chapter 11 is primarily for businesses that need to restructure without shutting down. Individuals whose debts exceed the Chapter 13 caps also file here. The business typically keeps operating as a “debtor in possession,” meaning ownership continues to run day-to-day operations while developing a reorganization plan under court oversight.7United States Courts. Chapter 11 – Bankruptcy Basics The debtor in possession takes on the duties a trustee would otherwise carry: protecting creditor interests, filing reports, and managing the estate honestly. A plan might renegotiate leases, cut interest rates, or extend payment timelines. Creditors vote on it, and the court confirms it when the legal requirements are met.8Office of the Law Revision Counsel. 11 U.S. Code 1107 – Rights, Powers, and Duties of Debtor in Possession
Subchapter V for Small Businesses
Subchapter V is a streamlined version of Chapter 11 created for smaller businesses. It cuts much of the cost and complexity of a traditional filing. To qualify, aggregate debts cannot exceed $3,024,725, and at least half must arise from business activities.9United States Department of Justice. U.S. Trustee Program – Subchapter V There is no creditor vote on the plan, and cases move faster. For a Florida small business drowning in debt, Subchapter V is often the practical path.
Traditional Chapter 11
Larger companies, or those above the Subchapter V threshold, use the traditional process. It’s more expensive and can run a year or longer, but it accommodates complex multi-creditor situations, union contract renegotiation, and the sale of business divisions.
Chapter 12: Family Farmers and Commercial Fishermen
Chapter 12 exists because farm and fishing income is seasonal. Payment schedules can be timed to harvests or fishing seasons, which makes this chapter far more workable for these industries than Chapter 13’s rigid monthly plan.10United States Courts. Chapter 12 – Bankruptcy Basics
Eligibility is narrow:
- Family farmers: total debts no more than $12,562,250, at least 50% from the farming operation, and more than half of the prior year’s gross income from farming.
- Family fishermen: total debts no more than $2,568,000, at least 80% from the fishing business, and more than half of gross income from the operation.
Plans run three to five years, the debtor keeps land and equipment, and administrative costs are significantly lower than Chapter 11.
How Florida Exemptions Shape Your Choice
Exemptions decide what you keep. Florida lets you use its state exemptions instead of the federal set, and for most filers the state ones are substantially more generous. That matters most in Chapter 7, where non-exempt property is what the trustee can sell, but it also affects Chapter 13 planning because the plan must pay unsecured creditors at least what they would have received in a Chapter 7 liquidation.
Homestead
Florida’s homestead protection has no dollar cap on equity. A qualifying home worth $200,000 or $2 million is fully covered. The property cannot exceed half an acre inside a municipality or 160 acres outside one.11FindLaw. Florida Constitution Art. X, Section 4
Federal law adds a residency requirement: to claim Florida’s homestead exemption in bankruptcy, you must have been domiciled in the state for at least 730 days before filing, roughly two years. Move to Florida more recently and you may be limited to your previous state’s exemptions.12Office of the Law Revision Counsel. 11 USC 522 – Exemptions
Vehicle, Personal Property, and Wildcard
Florida protects up to $5,000 of equity in one motor vehicle. The state constitution separately exempts up to $1,000 of personal property.13The Florida Legislature. Florida Code 222.25 – Other Individual Property of Natural Persons Exempt From Legal Process Prescribed health aids and earned income tax credit refunds are also protected.
If you don’t claim the homestead exemption—typically because you rent or don’t own a home—you can apply a $4,000 wildcard exemption to any property you choose. Stack it on top of the vehicle exemption, for instance, and you can protect up to $9,000 in car equity. The wildcard doesn’t apply against debts for child or spousal support.13The Florida Legislature. Florida Code 222.25 – Other Individual Property of Natural Persons Exempt From Legal Process
Debts That No Chapter Will Erase
Regardless of which chapter you pick, federal law keeps certain debts alive. Knowing them up front prevents unpleasant surprises.14Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
- Child support and alimony survive every type of bankruptcy.
- Recent income taxes, taxes on unfiled returns, and taxes involving fraud cannot be discharged. Older income tax debts (generally more than three years past due, with returns timely filed) may be dischargeable.
- Government-backed and qualified private student loans survive unless you prove “undue hardship” in a separate adversary proceeding.
- Debts obtained by fraud or a materially false financial statement can be challenged and excepted from discharge.
- Debts for willful injury to another person or their property are nondischargeable.
- Liability for death or personal injury caused by driving under the influence is nondischargeable.
- Criminal fines, restitution, and most government penalties survive bankruptcy.
There’s also a timing trap. Consumer debts to a single creditor above $500 for luxury goods bought within 90 days of filing, or cash advances over $750 within 70 days, are presumed nondischargeable on the assumption that you charged them knowing you planned to file.14Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
Matching the Chapter to Your Situation
A few practical questions narrow the choice quickly.
If your income is below Florida’s median and your goal is to erase unsecured debt fast, Chapter 7 is usually the starting point. If your income is too high to pass the means test, or if you’re behind on a mortgage or car loan you want to keep, Chapter 13 gives you a three-to-five-year runway to catch up. If you owe more than the Chapter 13 caps—$526,700 unsecured or $1,580,125 secured—Chapter 11 is the individual alternative.
For business filers, the split is by size. Small operations under the $3,024,725 aggregate debt limit will generally prefer Subchapter V for its speed and lower cost. Larger companies use traditional Chapter 11. Family farmers and commercial fishermen who meet the income and debt tests get their own tailored path in Chapter 12, with seasonal payment scheduling other chapters don’t offer.
Property considerations can override the income analysis. A Florida homeowner with substantial equity may find Chapter 7 attractive because the unlimited homestead exemption typically protects the house, provided the 730-day domicile rule is satisfied. A renter with little to lose may prefer Chapter 7 for its speed and the $4,000 wildcard. Someone with valuable non-exempt property who wants to keep it will often choose Chapter 13, where paying unsecured creditors what they would have received in a liquidation lets you hold on to assets the trustee would otherwise sell.