Can I claim the Florida wildcard exemption?

15 Sep Can I claim the Florida wildcard exemption?

Last summer, the Florida legislature added a new $4000 wildcard exemption for each Florida resident who does not receive the benefit of a homestead exemption.  Previously, Judge Paskay decided that the new exemption was stackable with the existing $1,000 personal property exemption.  Now, we have two new court rulings in the Middle District of Florida that further guide the application of this new exemption in bankruptcy.

Debtors and trustees agree that the wildcard exemption applies to all non-homeowners and any homeowner who has moved out of his home prior to filing bankruptcy, but what about a homeowner who is still in his home on the filing date? Two recent cases decided by Judge Jerry Funk set the ground rules.

In the case of In re Ellis, Ch. 13 Case No 3:07-bk-4706 (M.D. Fla. August 1, 2008), Judge Funk set forth three factors for determining whether a real property owner could claim the wildcard exemption:

(1) Did the debtor claim the real property as exempt on the date of filing the bankruptcy?

(2) Did the debtor receive the benefit of the homestead exemption?

(3) Did the debtor timely and properly showed a clear and unambiguous intent to abandon the property?

The first factor is straightforward, but the last two require further interpretation.

In In re Sweatt, Ch. 13 Case No 3:08-bk-1113 (M.D. Fla. August 20, 2008), the debtors (1) did not claim their home as exempt and (2) indicated their intent to surrender the property on the Statement of Intentions.  However, they still resided in their house until two months after the bankruptcy was filed.  Judge Funk allowed the debtor to claim the wildcard exemption, stating, “. . . [A]lthough the Debtors did reside in the house for approximately 2 months after the filing of the petition, they have since moved from the home and the Court does not find the time period they resided in the home to be unreasonable.”

The Sweatt decision will allow the application Florida’s wildcard exemption to a broader group of debtors.  In essence, the debtor can claim the additional wildcard exemption if he doesn’t claim the homestead exemption on “Schedule C – Exemptions” and if he states that he is surrendering his home on the Statement of Intentions.

It is irrelevant whether the debtor still resides in the property.  Since Judge Funk stated that 2 months post-filing was a reasonable length of time to move out of the house and since the deadline for a trustee to file an objection to claimed exemptions is just slightly longer than two months, trustees will certainly abandon their objections to the wildcard exemption altogether.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.

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