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Bankruptcy in Florida: Chapter 7 vs Chapter 13 Explained

Bankruptcy is a serious decision with lasting consequences. If you are considering it to save your home or stop a foreclosure, here is what you need to know about how it works in Florida.

By Tyler Gibson Last updated August 24, 2026 ~12 min read

Quick answer

Filing for bankruptcy immediately stops foreclosure through the automatic stay. Chapter 13 bankruptcy allows you to catch up on missed payments over 3 to 5 years and keep your home. Chapter 7 bankruptcy discharges most unsecured debts but may not save your home unless you are current on payments and can claim Florida's homestead exemption. Florida has an unlimited homestead exemption for your primary residence (with a 1,215 day ownership requirement). Bankruptcy stays on your credit report for 7 to 10 years. It should only be considered after exploring all other options, including loan modification, short sale, and deed in lieu.

Chapter 7 Bankruptcy: Liquidation

Chapter 7 bankruptcy, also called liquidation bankruptcy, discharges most unsecured debts in exchange for giving up certain nonexempt assets to a court-appointed trustee.

How Chapter 7 Works

  • Most unsecured debts are discharged (credit cards, medical bills, personal loans)
  • The automatic stay stops foreclosure immediately upon filing
  • A trustee may sell nonexempt assets to pay creditors
  • Your home may be protected if you claim Florida's homestead exemption
  • Process takes 3 to 6 months from filing to discharge

Best For

Homeowners with limited income, overwhelming unsecured debt, and no realistic way to catch up on mortgage arrears. Those who qualify for Florida's homestead exemption and are current on mortgage payments.

Key Risks

Only temporarily stops foreclosure unless you reach a new agreement. You may lose property with significant nonexempt equity. Stays on credit report for 10 years. Makes it harder to rent or get credit.

Costs

Filing fee: approximately $300 to $400. Attorney fees: $1,000 to $2,500 depending on complexity. Court-approved credit counseling course: $10 to $50.

Chapter 13 Bankruptcy: The Homeowner-Friendly Option

Chapter 13 bankruptcy, also called a wage earner's plan, allows you to reorganize your debts and create a court-approved repayment plan over 3 to 5 years. For homeowners facing foreclosure, this can be a powerful tool.

How Chapter 13 Works

  • You propose a plan to catch up on missed payments (arrears) over 3 to 5 years
  • You must continue making regular mortgage payments on time during the plan
  • Unsecured debts may be partially repaid or discharged at the end of the plan
  • The automatic stay stops foreclosure immediately upon filing
  • You typically keep all your property, including your home

Best For

Homeowners who have regular income, want to keep their home, and can afford monthly mortgage payments if given time to catch up on arrears. Those with enough disposable income to fund a repayment plan.

Key Risks

Requires consistent income for 3 to 5 years. Filing fees, attorney costs, and trustee fees. Stays on credit report for 7 years. Court must approve the plan. If you fail to complete the plan, your case may be dismissed or converted to Chapter 7.

Costs

Filing fee: approximately $300 to $400. Attorney fees: $2,500 to $4,500 depending on complexity. Trustee fees: approximately 5% to 10% of plan payments. Court-approved credit counseling course: $10 to $50.

Florida Homestead Exemption in Bankruptcy

Florida has one of the most generous homestead exemptions in the United States. Understanding how it works is critical if you are considering bankruptcy.

Unlimited Dollar Value

There is no dollar cap on the equity you can protect in your primary residence in Florida. This is one of the strongest homestead protections in the country.

1,215 Day Rule

If you file bankruptcy within 1,215 days (about 3.3 years) of moving to Florida, the federal cap of $189,050 (as of 2026) limits your homestead exemption. You must have owned the property for this duration to claim the full unlimited Florida exemption.

What the Homestead Exemption Does Not Do

While the homestead exemption protects your home from most creditors, it does not block a foreclosure by your mortgage lender. The mortgage lien remains in place regardless of the exemption. The exemption protects equity from unsecured creditors, not the mortgage lender.

Other Requirements

The property must be your permanent residence. There are acreage limits (half an acre in a municipality, 160 acres elsewhere in Florida). The exemption does not apply to investment properties or second homes.

How Bankruptcy Stops Foreclosure

The automatic stay is one of the most powerful features of bankruptcy. Here is how it works in a foreclosure situation.

The Automatic Stay

The moment you file for bankruptcy, an automatic stay goes into effect. This immediately stops all collection activities, including foreclosure proceedings, wage garnishments, and debt collection calls. The lender cannot proceed with the foreclosure auction without first asking the bankruptcy court for permission.

In Chapter 13

The automatic stay lasts throughout the repayment plan. You can include missed mortgage payments in the plan and catch up over 3 to 5 years while making regular payments.

In Chapter 7

The automatic stay is temporary. The lender can file a motion for relief from the stay, and once granted, the foreclosure can proceed. Chapter 7 may only delay the foreclosure by a few months.

When Bankruptcy Makes Sense (and When It Does Not)

Bankruptcy May Make Sense If:

  • You have overwhelming unsecured debt beyond just the mortgage
  • You have regular income and can fund a Chapter 13 repayment plan
  • You want to keep your home and catch up on missed payments over time
  • You qualify for Florida's homestead exemption and are current on payments
  • You need to stop a foreclosure auction that is days or weeks away
  • You have a large deficiency judgment that you cannot pay

Bankruptcy May NOT Make Sense If:

  • Your only problem is the mortgage and you could qualify for a loan modification
  • You have significant equity that exceeds Florida's homestead exemption limits
  • You can sell the property through a short sale or traditional sale
  • You have enough income to catch up on payments without court protection
  • Your debt is primarily student loans or tax debt (hard to discharge)
  • You filed for bankruptcy recently and may not qualify for Chapter 7 again

Credit Impact of Bankruptcy in Florida

Bankruptcy has serious and long-lasting effects on your credit. Here is what to expect.

Chapter 7 Bankruptcy

Stays on credit report for 10 years. Credit score drops 130 to 200 points. FHA loans may be available 2 years after discharge. Conventional loans typically require 5 to 7 years.

Chapter 13 Bankruptcy

Stays on credit report for 7 years. Credit score drops 100 to 150 points. FHA loans may be available 2 years into the plan (with court approval). Conventional loans typically require 2 to 4 years after discharge.

Rebuilding After Bankruptcy

Many people successfully rebuild their credit after bankruptcy. Key steps: make all payments on time, use secured credit cards responsibly, keep balances low, and avoid new debt. Credit scores often begin recovering within 12 to 24 months after discharge.

How to Find a Bankruptcy Attorney in Florida

Bankruptcy is a complex legal process. You should work with an experienced bankruptcy attorney. Here is how to find one.

1

Check the Florida Bar Association

The Florida Bar's lawyer referral service can connect you with qualified bankruptcy attorneys in your area.

2

Look for Board Certification

The Florida Bar offers board certification in business bankruptcy law. Certified attorneys have demonstrated special expertise.

3

Read Reviews and Ask Questions

Look for attorneys with experience in your type of case. Ask about fees, the process, and how they handle mortgage-related issues.

4

Get a Free Consultation

Most bankruptcy attorneys offer free initial consultations. Talk to two or three before choosing one. Ask specific questions about how bankruptcy would affect your home and mortgage.

Alternatives to Bankruptcy

Bankruptcy should be your last resort, not your first option. Consider these alternatives first.

Loan Modification

Permanently change your loan terms to reduce payments. No credit damage if you stay current.

Short Sale

Sell for less than what you owe with lender approval. Less credit damage than bankruptcy.

Deed in Lieu

Voluntarily transfer the deed to the lender. Avoids a public auction.

Creative Solutions

Subject-to transactions, lease options, and other creative approaches.

Frequently Asked Questions About Bankruptcy in Florida

Can I file bankruptcy and keep my house in Florida?
In Chapter 13, yes, as long as you stay current on mortgage payments and complete your repayment plan. In Chapter 7, it depends on your equity and whether you qualify for Florida's homestead exemption. If you have owned your home for at least 1,215 days, Florida's unlimited homestead exemption may protect all of your equity from unsecured creditors. However, the mortgage lender can still foreclose if you do not make payments.
What debts are not discharged in bankruptcy?
Debts that typically cannot be discharged include most student loans, child support, alimony, tax debts (with some exceptions), debts from fraud, and court-ordered restitution. Secured debts like mortgages may still need to be paid or the collateral surrendered.
How many times can I file bankruptcy?
There are time limits between filings. For Chapter 7, you must wait 8 years after a previous Chapter 7 discharge. For Chapter 13, you must wait 2 years after a previous Chapter 13 discharge and 4 years after a Chapter 7 discharge. These limits affect whether you can receive a discharge, not whether you can file.
Is Chapter 7 or Chapter 13 better for stopping foreclosure?
Chapter 13 is generally better for stopping foreclosure because the automatic stay lasts throughout the repayment plan, and you can include missed mortgage payments in the plan. Chapter 7 only delays foreclosure temporarily, and the lender can ask the court to lift the stay so they can proceed with the auction. If your goal is to save your home, Chapter 13 is the stronger option.
Does bankruptcy clear a deficiency judgment?
Yes, in most cases. Bankruptcy can discharge a deficiency judgment, which is an unsecured debt. This is one reason homeowners facing a large deficiency may choose bankruptcy. However, if the deficiency was caused by fraud or certain other exceptions, it may not be dischargeable. Consult a bankruptcy attorney about your specific situation.
Can I sell my house while in Chapter 13 bankruptcy?
Yes, but you need court approval. If you want to sell during a Chapter 13 plan, your attorney must file a motion with the bankruptcy court. The proceeds from the sale may need to be used to pay off your mortgage and possibly your remaining bankruptcy plan balance. The court will consider whether the sale is in good faith and benefits your creditors.

Considering Bankruptcy?

Bankruptcy has serious financial consequences that last for years. Before making this decision, talk to a professional who can help you explore all your options and understand the tradeoffs.

Free Consultation

Sources and Further Reading

Last reviewed: August 26, 2026

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