I'm not sure if this can be done or not. Does anyone know if it would be allowed?
Here is the situation: I have a friend that found out yesterday that he is losing his job. He will probably get a sizable severance. His current home mortgage is about 600K, and he is very upside down on it. He has other significant debt that he also would like to discharge.
We live in Florida where there is an unlimited homestead exemption.
If he got a 200K severance, could he buy a house for cash, and move his homestead to it. Then walk away from his other home and file BK in 6 months when is income average is down.
It shouldn't be a preferential payment because he would not be paying down a debt.
He would be converting non-exempt cash into an exempt asset.
But is there a time limit on how soon before BK you can buy a house and then claim an exemption on it.
I tried doing some searches but came up empty. It is still hypothetical at this point because he doesn't know exactly what he is going to get and how much cash he will need to live on for the next six months. But he is looking at his options.
Thanks for any information.
Here is the situation: I have a friend that found out yesterday that he is losing his job. He will probably get a sizable severance. His current home mortgage is about 600K, and he is very upside down on it. He has other significant debt that he also would like to discharge.
We live in Florida where there is an unlimited homestead exemption.
If he got a 200K severance, could he buy a house for cash, and move his homestead to it. Then walk away from his other home and file BK in 6 months when is income average is down.
It shouldn't be a preferential payment because he would not be paying down a debt.
He would be converting non-exempt cash into an exempt asset.
But is there a time limit on how soon before BK you can buy a house and then claim an exemption on it.
I tried doing some searches but came up empty. It is still hypothetical at this point because he doesn't know exactly what he is going to get and how much cash he will need to live on for the next six months. But he is looking at his options.
Thanks for any information.
