Govt. Ron DeSantis vetoed legislation that would increase the maximum value of a motor vehicle that could be exempt from bankruptcy cases from $1,000 to $5,000.
The legislation would have increased the value of the exemptione of a debtor’s interest on a motor vehicle from $1,000 to $5,000 in bankruptcy. In his transmittal letter Announcing his veto of the bill, DeSantis said the increased exemption amount should also apply to processes outside of bankruptcy, in an effort to not incite bankruptcy.
“While it may be time to consider increasing the outdated exemption amount, this increase should apply to all people who can claim exemptions in Florida, whether bankrupt or not. , so that people don’t have an incentive to file for bankruptcy, which has a long duration. , negative consequences for a person’s credit history,” DeSantis wrote in the cover letter.
Currently in Florida, a debtor has the constitutional right to exempt their property from creditor claims as long as the property is used as a principal residence, according to the invoice analysis. If a debtor does not have homesteads, state law allows the debtor to exempt $4,000 of personal property in a bankruptcy proceeding.
However, additional state exemptions include wages earned as head of household, cash value of life insurance policies and annuity contracts, exempt pension funds and retirement accounts, and up to to $1,000 of debtor interest in a motor vehicle, which lawmakers sought to increase to $5,000.
“Historically, exempt assets have remained beyond the reach of a creditor unless specifically pledged in a collateral agreement. During the bankruptcy proceeding, the court determines whether the property is exempt from proceeding under the non-bankruptcy law,” reads the analysis of the bill.