Homestead exemptions under new bankruptcy law


E

ElJay

Does the new bankruptcy law change the homestead exemption for all states?
In some states, under the previous law, debtors could elect either the
federal exemptions or the state exemptions. Is that still true, or has that
changed?

If it did change, I assume that means that states like Arizona, Florida, and
Texas can no longer offer high or unlimited homestead exemptions?
 
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C

C. W. Grady, Esq.

Debtors may elect state exemptions in the state in which they have lived
for the 730 days prior to the filing. If they have moved during that
730 day period, the state exemptions are those for the state in which
they have lived for the majority of the time for the 180 days before the
730 day period. Clear? Ok, then, Regardless of the level of state
exemptions, the debtor may only exempt up to $125,000 of interest in a
homestead that was acquired within the 1,215 day period prior to the
filing, but the calculation of that amount does not include any equity
that has been rolled over during that period from one house to another
within the same state. Still with me? Ok, For those who have violated
securities laws or engaged in certain criminal conduct, the cap is
$125,000, notwithstanding a higher State law allowance. To the extent
the homestead was obtained through fraudulent conversion of non-exempt
assets during the 10 year period before the filing, the exemption is
reduced by the amount attributed to the fraud.

That, believe it or not, is what your elected representatives have
presented you with.

C.W.G., Esq.
(NY)
 
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E

ElJay

Thanks. Whew! What a workout!

I think it used to be that some people moved their homestead to states like
Florida and Texas before filing a Chapter 7. Now, if I understand the new
rules correctly, someone who moves FROM Florida or Texas to another state
(such as New York) can file a Chapter 7 and take advantage of the homestead
exemptions from their prior residence in Florida or New York -- if they make
the move during the 730 day period before filing, and lived in Florida or
Texas during the 180 days before the 730 before filing.
That, believe it or not, is what your elected representatives have
presented you with.
Unfortunately, they are my elected representatives, but I sure wasn't one of
the people who helped elect them.

Hopefully, those who were voted in before will get voted out, and a new
Congress can undo some of the crap in this so-called bankruptcy "reform"
bill.
 

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