az homestead exemption

[rbig]

Hi all,
First post.

My attorney is telling me that prior (even one day prior) to filing ch 7, I can take $120,000 cash and purchase a new house and then file for homestead exemption.

This seems to good to be true.

Wouldn't the court look at this as trying to defraud creditors by not paying the money to them instead of buying a new home?

Facts:
I owe $480k on a home worth $300K
I owe $900K on commercial real estate investments that have failed

Thanks

[DeadManCrawling]

You can do this in some states.

If Arizona has strong protection for homesteads, and it seems to from what you wrote, you can do this with no problem.

It is the same in Florida. The amount here is also 120k or so, unless you have also had a previous homestead for three years. Then, it is unlimited.

Texas is similar, too.

Nice to be in that position, if you have the money to pay cash for a home or equity to roll.

[keepmine]

I believe the number is now $137K.
In the bk reform act of 05, equity was capped at $125K if you owned your home for less than 1215 days before filing. The number is adjusted everyfew years.

(p)

(1) Except as provided in paragraph (2) of this subsection and sections 544 and 548, as a result of electing under subsection (b)(3)(A) to exempt property under State or local law, a debtor may not exempt any amount of interest that was acquired by the debtor during the 1215-day period preceding the date of the filing of the petition that exceeds in the aggregate $125,000 [$136,875 effective 4-1-07. Adjusted every 3 years by section 104.] in value in--

(A) real or personal property that the debtor or a dependent of the debtor uses as a residence;

(B) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence;

(C) a burial plot for the debtor or a dependent of the debtor; or

(D) real or personal property that the debtor or dependent of the debtor claims as a homestead.

http://doney.net/bkcode/11usc0522.htm

[rbig]

thanks

Thanks Keepmine for the reply.

I understand the homestead exemption.

My main question/concern is:

will I be allowed to use $80,000 in cash that I currently have to purchase a home, which I would then homestead,

then file ch7 non-consumer bankruptcy approx 6 months later?

Does anyone know of any case law that supports this?

Thanks!

[keepmine]

Thanks Keepmine for the reply.

I understand the homestead exemption.

My main question/concern is:

will I be allowed to use $80,000 in cash that I currently have to purchase a home, which I would then homestead,

then file ch7 non-consumer bankruptcy approx 6 months later?

Does anyone know of any case law that supports this?

Thanks!

Questions like this are why you have an attorney. Interview another couple of lawyers and see if there answer is the same as the first lawyers. Ask them for caselaw.

[despritfreya]

[rbig]

pre planning

Thanks Desprit for your informative answer.

I'll research those cases.

I expressed my concern to my attorney in a meeting on Thursday. He agreed to email me case law. While waiting, I thought I would check the forum for perhaps someone who has gone through my same situation.

As I am learning about BK, its all about verifying and re-verifying. It seems that because of some amiguity in the wording in bankruptcy law there is a lot of grey area.

Bottom line, one can just blindly trust their attorney, but I prefer to KNOW for myself...its my property on the line.

Thanks again.