Is Florida Prepaid College Fund Protected From Creditors And Bankruptcy Trustees Under Florida Law

Updated: May 10

Have you been paying into the Florida prepaid college program? With Florida prepaid, you can pay for you child's future tuition and most fees in affordable installments or a lump-sum payment including dormitories. If bankruptcy is in your future, you may be wondering if this money is going to be affected.







Money going into or being taken out of a Florida prepaid account is an asset but is not liable to attachment, levy, garnishment, or legal process in the state in favor of any creditor of or claimant against any program participant, purchaser, owner or contributor, or program beneficiary. There are exemptions in place to protect this money.


In Florida, Florida Statute 222.2 defines Florida’s exemption of assets in qualified tuition programs as:

“Moneys paid into or out of, the assets of, and the income of any validly existing qualified tuition program authorized by s. 529 of the Internal Revenue Code of 1986, as amended, including, but not limited to, the Florida Prepaid College Trust Fund advance payment contracts under s. 1009.98 and Florida Prepaid College Trust Fund participation agreements under s. 1009.981, are not liable to attachment, levy, garnishment, or legal process in the state in favor of any creditor of or claimant against any program participant, purchaser, owner or contributor, or program beneficiary.”


There is good reason, however, to contact an attorney. If the Trustee in your case notices that you have been putting large amounts of money into the prepaid college fund close to the time of filing for bankruptcy, they may view it as you were doing so in order to hide that money from the bankruptcy court. The rules for the Federal exemption are as follows:

  1. All money placed into the education savings account 2 years and longer before filing bankruptcy will be 100% exempt when filing bankruptcy.

  2. Money placed into the education savings account within 1 and 2 years of filing bankruptcy will only be exempt up to a certain amount. This means that any money placed into the savings plan above this set amount can be taken from the savings plan and distributed to your creditors.

  3. All money placed into the education savings account within 1 year from filing bankruptcy is not protected. All of it can be taken from the savings account by your Trustee and distributed to your creditors accordingly.Therefore, your money is safe from a bankruptcy trustee.


If you are considering filing bankruptcy, you should consult an attorney. There are details that should be considered and your assets don't all have exemptions. Most attorneys offer a free consultations. Contact us today to make sure you don't find yourself in a a situation that could cause you to lose your well-invested money.





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