How does homestead exemption work in a bankruptcy?

Asked 6 months ago - Tampa, FL

I have a $50,000 homestead exemption on my foreclosed property. The house is worth than
I owe. I am going to be filing for chapter 7.

Attorney answers (7)

  1. Kevin Christopher Gleason

    Pro

    Contributor Level 15

    6

    Lawyers agree

    Answered . The homestead exemption only benefits you as against unsecured creditors. If the house is worth less than the debt, you might as well forego the homestead exemption and take the $4k wildcard. If that does not make sense to you then perhaps you will consider professional assistance.

    Posting questions anonymously and receiving general answers do not substitute for consulting with an attorney... more
  2. Richard Michael Dauval

    Pro

    Contributor Level 10

    4

    Lawyers agree

    Answered . In Florida you get an exemption from property taxes for your homesteda of $50,000. This is different than the Florida Constitutional homestead which protects the home from the grab of your creditors. I believe you are confusing the two. As a general proposition the Constitutional Florida Homestead exemption protects the entire value of the home, however there a few carve outs that can weaken the protection. Consult with an attorney before filing bankruptcy if your goal is to protect the home from falling into the bankruptcy estate.

  3. Carol A. Lawson

    Contributor Level 7

    2

    Lawyers agree

    Answered . You are confusing the homestead exemption for property taxes, with the homestead exemption in bankruptcy. If you are living in the home and do not take the homestead exemption the home will become part of the bankruptcy estate. The trustee may then sell your interest or force you to pay rent. If you are not living in the home, the $4,000 wild card exemption may benefit you more.
    Consult with a bankruptcy attorney in your are before filing.

    Although I’m going to give you a lot of valuable information in this answer you must understand that this answer... more
  4. William Joseph Kopp Jr.

    Contributor Level 12

    2

    Lawyers agree

    Answered . You probably need and attorney to deal with your case. I only say that because if you mess up your exemptions you can lose your stuff and we are more expensive to hire after filing the case because it take a lot more time to fix a case that it does to just do one in the 1st place.

  5. Dorothy G Bunce

    Pro

    Contributor Level 20

    3

    Lawyers agree

    Answered . A bankruptcy exemption protects your equity in real estate from creditors and the bankruptcy trustee cannot take this money if claim the exemption on your bankruptcy schedules. But I am confused, if the property is foreclosed, you may no longer own it and may be ineligible to claim any equity in the property as a homestead. Hope this perspective helps!

  6. Blake Owen Brewer

    Contributor Level 16

    3

    Lawyers agree

    Answered . Your question does not identify the property as your residence. Here in Ohio, the homestead exemption only applies to your residence. It can be a condo, a house, a trailer, a teepee, whatever, but if the property is not your residence (rental property, for example) you cannot claim the homestead exemption on it.

    I am not your attorney unless you and I have signed a retainer agreement. What I am saying is not legal advice.... more
  7. Robert Hunter Pflueger

    Contributor Level 7

    1

    Lawyer agrees

    Answered . The Homestead exemption protects the equity in your homestead property. If the house is already foreclosed, I don't see where the issue even arises.

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