Can you lose Homestead wildcard exemption by moving?

[bllyshrs]

I haven’t been able to find an answer to this, so perhaps someone with some experience can chime in. I am filing Ch 7, but it looks like I will have to wait a couple more months to pass the means test. I currently live in a property which is deep underwater, and based on FL exemptions can be surrendered which will give me an additional $4k wildcard exemption for other personal property (mainly vehicle equity, which I need).

However, at the end of the summer I might be moving if I get accepted into college out of state. My original plan would have been to file asap and possibly move in a couple months after my 341. I don’t mind having to come back for my 341 meeting, but I’m concerned that if I leave my residence and move to say Tennessee, suddenly I don’t have a homestead wildcard anymore. I have heard about that happening to others but usually those people got jobs elsewhere or rented out their old place for a year. I know that since I have lived in Florida for several years I get to use Florida exemptions regardless where I file in the next 22 months or so. However, that aside, if I file for Ch7 the day after I move to another state, will I lose my $4k wildcard?

My other concern is that I haven’t been current on the mortgage due to a job loss (hence the BK). I haven’t received a single notice about a foreclosure or sale of property, and FL is notoriously long on foreclosures. But I have no idea what can happen in two months. If i get served with a 20 day notice a week from now, could that thwart my homestead exemption? I really wish I could file right now, but based on the timing of this ridiculous means test (6 months) it makes it look like i’m making too much money today.

Any thoughts?

[justbroke]

You lose your right to a homestead exemption once you are domiciled somewhere else. The key will always be, where are you domiciled? You can determine that by answering "yes" to... a.) do you have a Florida driver's license, b.) are you registered to vote in Florida, c.) where is the majority of your property/business, and/or d.) have you filed a declaration of domicile in Florida?

You can go to college in another State and still be domiciled in Florida. It could get tricky with a driver's license but most college students (18-22) are still domiciled where their parents live.

I would be more worried about the right venue. In any case, you live in Florida and have property in Florida, so your primary assets are in Florida. You would file in Florida for venue. The "unused homestead exemption" is for anyone that is "domiciled" or required to file in Florida, but doesn't get the benefit of the homestead exemption, gets a wildcard in the amount of $4K per debtor (F.S. 222.25(4) if I remember correctly). In other words, you don't need to have "owned" any property. It's in lieu of owning property (or, more technically, receiving the benefit of the unlimited homestead exemption), you get the $4K. So, I would not worry about your home... I'd be more worried about "venue" and "domicile".

[tobee43]

jb you do remember correctly about the florida wildcard exemption. it was our sole purpose to get of our nj, a very unfriendly debtor state ( and although nj also allows one to file federally, that was not a bargain either), and move to florida to file. however, we needed to go underground..(LOL!) but true, to establish residency for two full years to be able to claim the wildcard exemption and since we didn't own a home at the time in florida.

also, just a question jb...since and if the OP does in fact move out of state, and since OP would be a resident less than i.e. 6 months, of that state, and filed in their new state, couldn't they still use florida for their filing status?

[justbroke]

Venue is tricky. For this particular case, it may be in the debtors best interest to file in Florida, before moving. Of course, I'd defer to a Florida bankruptcy attorney that is admitted to practice in the U.S. Bankruptcy Court.

As for Florida exemptions, I believe that you must actually be a Florida resident to use Florida exemptions. Therefore, you'd have to revert to Federal Exemptions if the State in which you are filing requires a residency of more than a mere 6 months, in order to use their exemptions. This is why moving is SUCH an issue with Bankruptcy! I will always defer this type of discussion to an attorney for exactly these reasons!

[tobee43]

i do know that for us, we had to have had to establish 2 years of proof of residency prior to our being about to file in flordia, and take advantage of the wildcard exemption.

i very much agree, i would most certainly defer to an atty on the situation. we hired a florida atty, prior to moving here and followed the firms advise. we just were fortunate to go be able to go "underground" and off the radar, grid, and literary hide out those two years enabling and allowing us to afford the opportunity to file in florida. for us, it was a far better choice, i think each person needs to take advantage of what opportunities presents or allows them to do, and, for them to make the best sound business decision for their own personal needs and direction.

[helpmeout]

Not that this is an option in Florida as that state does not allow the choice between choosing either the federal exemptions or the state's exemptions, but the federal exemptions do allow you to use a portion of the homestead exemption as a wildcard (I believe that it is higher than $4K). If Tennessee allows you to use federal exemptions, it really shouldn't matter when you move, it would just be a question of how long you need to live in Tennessee (or whatever state you move to) to establish residency. A consult with a BK attorney should be able to answer some of your questions regarding moving.

[tobee43]

Not that this is an option in Florida as that state does not allow the choice between choosing either the federal exemptions or the state's exemptions, but the federal exemptions do allow you to use a portion of the homestead exemption as a wildcard (I believe that it is higher than $4K). If Tennessee allows you to use federal exemptions, it really shouldn't matter when you move, it would just be a question of how long you need to live in Tennessee (or whatever state you move to) to establish residency. A consult with a BK attorney should be able to answer some of your questions regarding moving.

right, if we had attempted to file prior to establishing our residency in florida, (which was 2 years) we would have had to go federal. our problem was we had NO home........to stead....LOL!!! we needed that "personal" wildcard which was far more attractive to us since we surrendered our home we certainly couldn't use it as an exemption.

[helpmeout]

right, if we had attempted to file prior to establishing our residency in florida, (which was 2 years) we would have had to go federal. our problem was we had NO home........to stead....LOL!!! we needed that "personal" wildcard which was far more attractive to us since we surrendered our home we certainly couldn't use it as an exemption.

The federal exemptions allow $10,825 of unused homestead exemption as a wildcard. That's higher than the $4k exemption in Florida.

[tobee43]

i know in our case...if you use the state exemptions in any state, you can also claim certain exemptions set by federal law as well as those listed in the federal nonbankruptcy exemptions. i know that's confusing.

i really know only of several states have created a “wildcard,” which is an exemption that you can apply to any property where the federal restricts the liminations of where is can be applied...i could be incorrect. example, if you own a car in connecticut worth $2,500 and the exemption for motor vehicles is $1,500, you can use the $1,000 the state allows as a wildcard to make up the difference. and this particular type of wildcard also allows one to apply the amount to be used to exempt property that isn’t listed as an exemption, such as a piece of art. value of the wildcard, like other exemption amounts, varies from state to state.

"States where you have the choice of using either the federal exemptions or the state exemptions (you never get to use both at the same time) are: Arkansas, Connecticut, District of Columbia, Hawaii, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, and Wisconsin.

Federal exemptions differ from state exemptions and state exemptions vary from jurisdiction to jurisdiction. For instance, the maximum exemption for a car in Florida is $1,000, while in Texas it can be up to $30,000. In some states, a debtor’s residence can never be taken, no matter how valuable it is, while in others the protected value is less than $10,000. This means that how much you lose to creditors or have to give up when you file for bankruptcy depends largely on where you live."


i know for us, as it worke out we were far better not staying in nj using the federal or state, but were better off in florida since we needed to apply that wildcard exempt allocation in a certain way, where ...and i think this is the funtumental difference about this wildcard... again, and again i could be wrong...you can apply it anywhere. all i know is we worked it both ways actually three ways...florida, nj and federal and for us florida was in our personal best interest.


i'll list the wildcard for the Federal and how and where it can be applied:


Using the Wildcard Exemption in your U.S. federal bankruptcy case:
.
(1) The debtor’s aggregate interest, not to exceed $21,625 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.

(2) The debtor’s interest, not to exceed $3,450 in value, in one motor vehicle.

(3) The debtor’s interest, not to exceed $550 in value in any particular item or $11,525 in aggregate value, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(4) The debtor’s aggregate interest, not to exceed $1,450 in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(5) The debtor’s aggregate interest in any property, not to exceed in value $1,150 plus up to $10,825 of any unused amount of the exemption provided under paragraph (1) of this subsection.

(6) The debtor’s aggregate interest, not to exceed $2,175 in value, in any implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor.

(7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.

(8) The debtor’s aggregate interest, not to exceed in value $11,525 less any amount of property of the estate transferred in the manner specified in section 542(d) of this title, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.

(9) Professionally prescribed health aids for the debtor or a dependent of the debtor.

(10) The debtor’s right to receive–

(A) a social security benefit, unemployment compensation, or a local public assistance benefit;

(B) a veterans’ benefit;

(C) a disability, illness, or unemployment benefit;

(D) alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;

(E) a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless–

(i) such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor’s rights under such plan or contract arose;

(ii) such payment is on account of age or length of service; and

(iii) such plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986.

(11) The debtor’s right to receive, or property that is traceable to–

(A) an award under a crime victim’s reparation law;

(B) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;

(C) a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of such individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;

(D) a payment, not to exceed $21,625, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or

(E) a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(12) Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.

[helpmeout]

i know in our case...if you use the state exemptions in any state, you can also claim certain exemptions set by federal law as well as those listed in the federal nonbankruptcy exemptions. i know that's confusing.

We've had this argument before. You are just as wrong now as you were then.

You can ONLY use Federal Exemptions in states that ALLOW IT. NJ does, Florida does not. Many of the state exemptions may be similar or the same as the Federal Exemptions, but they are still considered the state's exemptions.

You cannot intermingle the two. If the state exemptions does not have a homestead exemption and does not allow the use of Federal exemptions (to be clear, it is either/or not both like you are implying), then there is no homestead exemption. Period. If the state that does not allow the choice of using federal exemptions and does not allow the conversion of any unused homestead exemptions to a wildcard, then you don't get to use the federal homestead exemption as a wildcard. Like you implied.

Links have been posted, especially in regards to Florida, that prove that one cannot use the federal exemptions in states that do not allow it.

As I stated before, and got from the Federal Exemptions list, up to $10,825 of the unused Federal Homestead exemption can be used as a wildcard. But ONLY if you are using Federal Exemptions and ONLY in states that allow the choice. If you go with the State's Exemptions in state's that allow the choice, you forfeit the ability to convert the unused $10,825 portion of the homestead exemption to a wildcard.

And $10,825 is still higher than $4K.

[debee]

If OP moves to TN, she can file bk there 91 days into her residency. (Which she can hasten to establish via voter registration, driver's, etc.)

She can't use TN exemptions for a couple years though, so she would need to use the exemptions of the state where she resided for the most of the 180 day period that ended two years before her filing date.

So if she was in FL for most of that time, FL would be her state.

However since FL has a residency requirement (and OP will forfeit that by moving and establishing her residency in TN), she will be able to use the Federal exemption amount of $10,825 that helpmeout mentions in her post.

[ValleYum]

@helpmeout

Perhaps tobee43 is referring to the Supplemental Federal Exemptions in her post? They are used in conjunction WITH state exemptions and protect such things as retirement benefits, survivor's benefits, etc.

http://www.bankruptcyinformation.com/exempt-supp.htm

[helpmeout]

@helpmeout

Perhaps tobee43 is referring to the Supplemental Federal Exemptions in her post? They are used in conjunction WITH state exemptions and protect such things as retirement benefits, survivor's benefits, etc.

http://www.bankruptcyinformation.com/exempt-supp.htm

Could be. But nowhere in there does it say that any part of the Federal Homestead exemption can be used when using State Exemptions. Either way, Florida does not allow the use of Federal Exemptions.

[justbroke]

Debee has summed it up exactly how the law stands. If you move, you lose Florida exemptions, but may actually be able to get the "fallback" Federal Exemptions!

[ValleYum]

Could be. But nowhere in there does it say that any part of the Federal Homestead exemption can be used when using State Exemptions. Either way, Florida does not allow the use of Federal Exemptions.

Nope, nothing about the Federal Homestead exemption there.

You are correct that one can not use the Federal exemption set in FL - but you can use the Supplemental Federal Exemptions in FL if you need to protect any of the assets that they cover.