Whether you can keep jewelry and wedding rings in Florida depends on what type of bankruptcy you file (Chapter 7 or Chapter 13), how much the jewelry is worth, and whether you need to protect other assets as well.
Keeping Jewelry in Chapter 13 Bankruptcy in Florida
In Chapter 13 bankruptcy, often called a reorganization bankruptcy, you enter into a repayment plan for three to five years. Your creditors get paid through the plan – some in full and some in part. Although a Chapter 13 plan requires a long commitment, the advantage is that you get to keep your property, including jewelry.
If you have very expensive jewelry however, that will probably affect how much you will be required to repay unsecured creditors.
Keeping Jewelry in Chapter 7 Bankruptcy in Florida
Chapter 7 bankruptcy works differently. In Chapter 7, you must give up certain items of property. The bankruptcy trustee sells this property and uses the proceeds to repay (at least in part) your unsecured creditors.
Florida Bankruptcy Exemptions
Not all of your property is up for grabs, however. Florida (and all of the other states) has enacted laws that protect certain types of property. These laws are called exemptions. Some property is exempt no matter what the value, and other property is exempt only up to a dollar amount. The idea behind exemptions is that someone filing for bankruptcy should not be stripped of basic things needed for living – like shelter, clothing, furniture, a car, and the like. (Learn more about how bankruptcy exemptions work.)
Some states allow you to choose between the state exemption system and another set, called the federal bankruptcy exemptions. But Florida is not one of these states. If you file for bankruptcy in Florida, you must use the Florida bankruptcy exemptions.
Florida’s Personal Property Exemption
Unlike some states, Florida does not have a specific exemption for jewelry. But it does have a general personal property exemption which allows you to keep up to $1,000 worth of any type of personal property, such as clothing, jewelry, wedding rings, furniture, and the like. (Florida has a separate exemption for motor vehicles.) If you are married and filing a joint bankruptcy case, you can double this amount. If you don’t have a home you need to protect with Florida’s homestead exemption, you can exempt up to $4,000 of your personal property. (Learn more in The Florida Wildcard Exemption in Bankruptcy.)
Keep in mind that these amounts apply to all of your personal property in the aggregate. So if you want to protect $500 worth of furniture, you’ll only have $500 left for jewelry (assuming you are not filing jointly and have a home to protect with the homestead exemption).
How to Value Jewelry in Bankruptcy
The value of your jewelry for exemption purposes is the amount you would have to pay, on the date you file for bankruptcy, to replace each item with a used item of similar age and in similar condition. There are various methods of determining the replacement value, but for expensive jewelry you will almost always need an appraisal. (Learn more about how to value personal property in bankruptcy.)
Other Ways to Keep Jewelry in a Florida Bankruptcy
If you want to keep nonexempt items of jewelry, the trustee may accept other items of exempt property in exchange for the jewelry. The trustee would then sell these items instead of your jewelry to repay your creditors.
Similarly, if you have some cash, you may be able to reimburse the bankruptcy trustee for the value of the jewelry you want to keep. Again, the trustee would use this money (instead of selling the jewelry) to repay unsecured creditors.