This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0265a.CIV
DATE: 1/13/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 265 Value Of Motor Vehicles Exempt From Legal Process
SPONSOR(S): Civil Justice & Property Rights Subcommittee, Gottlieb and others
TIED BILLS: IDEN./SIM. BILLS: SB 528
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Civil Justice & Property Rights Subcommittee 15 Y, 0 N, As CS Mathews Jones
2) Insurance & Banking Subcommittee
3) Judiciary Committee
SUMMARY ANALYSIS
The Florida Constitution allows a debtor to exempt a homestead property, regardless of value, from the claims
of creditors as long as it is used as a residence. In addition to this constitutional exemption of homestead
property and other personal property, Florida law protects certain assets from legal process so that they
remain beyond a creditor’s reach, including:
Funds held in individual retirement accounts (“IRA”) and other tax-exempt accounts.
The cash surrender value of a life insurance policy and the proceeds of an annuity contract.
Funds held in qualified tuition programs and medical, Coverdell education, and hurricane savings
accounts.
Disability income benefits.
Wages, unless the debtor agrees to waive the exemption in writing.
Social security benefits; unemployment compensation, or public assistance benefits; veterans’ benefits;
alimony, support, or separate maintenance; and stock or pension plans under specified circumstances.
A debtor’s interest in any professionally prescribed health aids for the debtor or for a debtor’s
dependent.
A debtor’s interest in a refund or a credit received or to be received pursuant to the Internal Revenue
Code; however, this exemption is not applicable to a debt owed for child support or spousal support.
A debtor’s interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the
benefits of a homestead exemption; however, this exemption is not applicable to a debt owed for child
support or spousal support.
A debtor’s interest, not to exceed $1,000 in value, in a single motor vehicle.
CS/HB 265 increases the maximum value of an exempt motor vehicle from $1,000 to $5,000 in a bankruptcy
case.
The bill does not appear to have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2022. STORAGE NAME: h0265a.CIV PAGE: 2
DATE: 1/13/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Constitutional Exemptions
The Florida Constitution allows a debtor to exempt a homestead property, regardless of value, from the
claims of creditors as long as it is used as a residence as well as up to $1,000 in personal property.
1
Other Asset Exemptions
In addition to the exemption of homestead property and personal property provided by the Florida
Constitution, chapter 222, F.S., protects certain assets from legal process so that they remain out of a
creditor’s reach, including:
Funds held in an individual retirement account (“IRA”) and other tax-exempt accounts.
2
A life insurance policy’s proceeds.
3
A life insurance policy’s cash surrender value and an annuity contract’s proceeds.
4
Funds held in qualified tuition programs and medical, Coverdell education, and hurricane
savings accounts.
5
Disability income benefits.
6
Wages, unless the debtor agrees to waive the exemption in writing.
7
Certain personal property items.
8
Any professionally prescribed health aides.
9
Social security benefits; unemployment compensation, or public assistance benefits; veterans’
benefits; alimony, support, or separate maintenance; and stock or pension plans under
specified circumstances.
10
A debtor’s interest in a motor vehicle, up to $1,000 in value.
11
Historically, exempt assets have remained exempt from a creditor’s reach unless specifically pledged in
a security agreement.
12
Bankruptcy
Filing bankruptcy can help a person to financial recovery by discharging debt or making a plan to repay
debts. All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy
Code.
13
In general, the purposes of bankruptcy are to convert the estate of the debtor into cash and
distribute it among creditors, and to give the debtor a fresh start.
14
The filing of a bankruptcy petition
operates as an automatic stay on most legal actions against a debtor, including a foreclosure.
15
The
1
Art. X, S. 4, Fla. Const.
2
S. 222.21, F.S.
3
S. 222.13, F.S.
4
S. 222.14, F.S.
5
S. 222.22, F.S.
6
S. 222.18, F.S.
7
Ss. 222.11 and 225.15, F.S.
8
S. 222.061, F.S.
9
S. 222.25, F.S.
10
S. 222.201, F.S.
11
S. 222.25(1), F.S.
12
Real Property, Probate, and Trust Law Section of the Florida Bar (“RPPTL”), White Paper (Jan. 26, 2021); see, e.g., Havoco of Am.
Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001); Connor v. Seaside Nat’l Bank, 135 So. 3d 508 (Fla. 5th DCA 2014); Killian v. Lawson, 387 So.
2d 960 (Fla. 1980).
13
11 U.S.C. s. 101, et seq.
14
9 Am Jur 2d Bankruptcy s. 5.
15
11 U.S.C. s. 362(a)(4). STORAGE NAME: h0265a.CIV PAGE: 3
DATE: 1/13/2022
automatic stay is in effect from the time the petition is filed until discharge of the debtor, unless sooner
lifted by the bankruptcy court.
There are two primary forms of bankruptcy an individual may file.
16
In a proceeding under Chapter 7 of
the bankruptcy code, the debtor surrenders his or her assets to a trustee who then liquidates the assets
and distributes proceeds to the creditors.
17
A petition filed pursuant to Chapter 7 of the bankruptcy code
is used when the rehabilitative chapters of the code would not be applicable, such as when there is no
nonexempt property to protect.
18
A Chapter 13 petition allows the debtor to stay creditor actions and
propose a plan to pay creditors, rehabilitating the debtor financially.
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Effect of Proposed Changes
CS/HB 265 amends section 222.25, F.S., to increase the maximum value for a single exempt motor
vehicle from $1,000 to $5,000 in bankruptcy cases.
The bill provides an effective date of July 1, 2022.
B. SECTION DIRECTORY:
Section 1: Amends s. 222.25, F.S., relating to other individual property of natural persons exempt from
legal process.
Section 2: Provides an effective date of July 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
16
An individual can file a petition under Chapter 11, but it is rare.
17
11 U.S.C. ss. 704 & 726.
18
9 Am Jur 2d Bankruptcy s. 68.
19
9 Am Jur 2d Bankruptcy s. 72. STORAGE NAME: h0265a.CIV PAGE: 4
DATE: 1/13/2022
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
None.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 13, 2022, the Civil Justice and Property Rights Subcommittee adopted one strike-all
amendment and reported the bill favorably as a committee substitute. The committee substitute limits the
increased exemption amount of $5,000 in a single motor vehicle to apply only in bankruptcy cases. For all
other matters, a debtor’s interest in a single motor vehicle remains exempt up to $1,000 in value.