homestead exemption not married or hoh

[arkansasbk]

Hi everyone,

I've been reading this forum for about eight months now. Thanks so much for all of the great information. This is the best bankruptcy site I've been able to find. I haven't filed yet, but will be in the next few months. My question is I noticed two trustee cases regarding head of household and the homestead exemption in my state. I never even considered it before, I just assumed the homestead exemption applied to everyone. I'm not married. I live with my fiancee. I have no children or dependents so I don't count as head of household. Has anyone encountered the situation where they were denied the federal homestead exemption over this? I haven't found any information on it on a federal or state level. Thanks for responding!

[anonymuse]

I always assumed it would apply to someone who is single. I've seen cases on PACER where people were single without kids, filed for chapter 7, and kept the house.

Whose name is on the mortgage? How long have you been together? Do you live in a common law state? Are you both filing for bk or just yourself?

[no_it_all]

<snip>I'm not married. I live with my fiancee. I have no children or dependents so I don't count as head of household. Has anyone encountered the situation where they were denied the federal homestead exemption over this?<snip>

No

[confusedinfl]

My understanding is that the homestead does apply to everyone whether single, married or head of household. Are you thinking of whether a creditor could garnish wages? Wage garnishment cannot be done if you are head of household I believe.

[SinkingFast]

If you are single, you are the Head of your Household and entitled to all the exemptions of the Head of Household.

Living with someone else does not make them the Head of your Household. The definition of Household members are people related by blood and/or marriage. So, your BF is not a member of your Household. Your residence, in fact, is home to 2 seperate Households at this time. If and when you marry your BF, then he becomes the Head of your Household. But not til then.

[arkansasbk]

Thanks for responding. That's what I always thought, that a single person counted as head of household, and as such was eligible for the homestead exemption. I reviewed a few cases in the past few months here in my area of arkansas where a trustee was challenging the head of household status in two cases. It made me very nervous all of a sudden! It was the same trustee in both cases, but it went before the bankruptcy judge in my area. They reviewed all sorts of details and ruled in favor of the debtors, but they had family dependants (elderly parents) living with them. The judge gave that as the reason for siding with the debtors. I'm going to get on pacer and see other cases around here. Both of those were using the Arkansas exemptions and I plan on using the federal exemptions. I don't know if the arkansas law regarding homestead exemptions are different than the federal law.

Anonymuse- To answer your questions. I plan on filing on my own. The mortgage is in my boyfriend and I's name. We've been together for ten years, but do not live in a common law state.

[SinkingFast]

Back in January, when we first started learning about BK, there was no clear definition of "family" or "household". We have an elderly parent living with us. We claim her on our income taxes. I did a little research and found the Census Bureau definition of "related by blood and/or marriage" thing. One attny told me that certainly made for a good arguement to the Court, but still wouldn't consider the parent in the BK.

The Census Bureau goes on to explain about different examples of "Households". One cited was 5 college roomates living together in one apartment. None related to each other. That's 5 seperate households occupying one residence. A married couple or family takes in a boarder. The family or married couple is one household while the boarder is another household. Both seperate households yet occupying the same residence.

Since January, the US Trustee's Office (I think, maybe the Judicial Branch??) has ruled on several things. One of those being the definition of the Household. Basically, if the person meets the IRS standards and the Census Bureau definition, then they are a member of the household for BK purposes as well. So our elderly parent has officially been defined as a member of our household for BK purposes.

There are other gaps in the New BK Law that have been addressed and are still being uncovered. Finding an attny under the New Law to take on a cutting edge decision is probably gonna be a problem for sometime to come.

Wanted to add,..........

I've seen a filing on PACER here where it was a single mother with one younger dependent child and an older dependent as well. The older one was a 25, 27 year old male. I'm guessing from all the medical bills being discharged, the older male was either mentally or physically handicapped. The attny was including that person as a dependent for BK purposes.

[anonymuse]

I've seen some opinions that called in question whether taking care of an individual could be considered in the expenses and it came down to whether they were legally obligated to take care of them. I know if my parents were ill, I would be morally obligated to take care of them, but who knows if the court would think I would be legally obligated to.

[SinkingFast]

Well, we're not legally obligated to take care of Mom, but we sure have saved the State and Federal Gov't a lot of money by doing so. If she were in a home, she'd cost them money. Not me!

[no_it_all]

That's what I always thought, that a single person counted as head of household, and as such was eligible for the homestead exemption.

What does being a head of a household have to do with the homestead exemption?? Please explain...

[no_it_all]

I have no children or dependents so I don't count as head of household.

If it is just you, then you are right, you are not a head of a household...Not to be smart, but to be a head of the household, there ah, has to be someone there besides you to take care of..

[SinkingFast]

If it is just you, then you are right, you are not a head of a household...Not to be smart, but to be a head of the household, there ah, has to be someone there besides you to take care of..

Not exactly true.

According the the Census Bureau a single person living in a residence constitutes a household.

If a person files taxes for themselves, and they are not a spouse filing seperately or claimed as a dependent on another person's income tax forms, they are "THE" filer according to the IRS.

Both situations would cause said person to be the Head of the Household.

You don't have to have dependents or a spouse to be the Head of your own Household.

The IRS and the Census Bureau definitions are the basis for most of the BK Code.

Some States word some BK exemptions specifically for the Head of the Household. Arkansas only has one exemption specifically worded for the Head of the Household. It's a WildCard. $500 for HoH. $200 otherwise.

[no_it_all]

Not exactly true.

According the the Census Bureau a single person living in a residence constitutes a household.

Correct, but that has absolutely nothing to do with determining head of household status. It is not relevant.

If a person files taxes for themselves, and they are not a spouse filing seperately or claimed as a dependent on another person's income tax forms, they are "THE" filer according to the IRS.

Using the above information, the filing status of that individual would be "single" and not "head of household".

Both situations would cause said person to be the Head of the Household.

Incorrect. The Census Bureau determination of "household" has nothing to do with IRS determinations of "Head of Household" Remember: a "household" and "head of household" are two different things.

You don't have to have dependents or a spouse to be the Head of your own Household.

Incorrect. According to the IRS you must have a "qualifying" person living with you and you must have paid more than half the cost of maintaining the home. This is lifted from the IRS site:
You must also have provided more than half the cost of maintaining as your home a household that was the main home for a qualifying person.
In addition, if you are married it is almost impossible to claim head of household filing status.

Some States word some BK exemptions specifically for the Head of the Household. Arkansas only has one exemption specifically worded for the Head of the Household. It's a WildCard. $500 for HoH. $200 otherwise.

Again, head of household is a single person (most often) that has provided more than half the care and maintaince of a home for a qualifying person. A household is an apartment, home, trailer, etc that people live in..even if there is only one person living there, it is considered a household..but that person is most certainly not a "head of household"..

Generally, to qualify for head of household status, you must be unmarried and not entitled to file as a qualifying widow or widower with a dependent child. You must also have provided more than half the cost of maintaining as your home a household that was the main home for a qualifying person. You may also qualify for head of household status if you, though married, file a separate return, your spouse was not a member of your household during the last six months of the tax year, and you provided more than half the cost of maintaining as your home a household that was the main home for more than one half of your tax year of a child who is qualifying.

[no_it_all]

<snip>Your residence, in fact, is home to 2 seperate Households at this time. If and when you marry your BF, then he becomes the Head of your Household. But not til then.

It is important to understand why the term "household" is used. It is for economic statistical purposes. The Census Bureau defines household as being the individuals that live in a single home. If they are married, not married, related, not related, etc is of no importance whatsoever. A home is always considered a single household..there is no such thing as a home being two separate households....Oh, and why would the man become the "head of household" in the example quoted? Sounds kinda olde skool to me!!! Why not the woman??? I think someone is showing their age!!!

[no_it_all]

Well, no-it-all: "age"...uh, huh...we'll leave that one alone. However, for tax purposes the IRS wants consistency on listing on returns, so if Joe Blow has returns filed under that name and his SS# for several years, and marries Jane Doe who has filed as Jane Doe, when she becomes Jane Doe Blow she will be listed second as the IRS will match returns against first listed name and SS# and expect Joe's to appear first.

Does that have <anything> to do with why someone would claim (incorrectly) that when a woman married her boyfriend HE would become head of household?? I didn't think so....Especially since someone that is married cannot claim head of household except in rare situations...

And two unrelated people in same house sharing expenses can both be head of household for tax purposes if they each provide more than half of ALL expenses for their own children, etc, living with each one of them. It has nothing to do with the physical "house" for the IRS, just the money put out. But they can't consider each other in that $ amount.

You are incorrect. To claim head of household for tax purposes several challenges must be met. First, you have to have a "qualifying" person in the house. If you don't have that, the flow chart stops. If you have a qualifying person living with you more than half the time, then you have to meet the second threshold. That is the one that requires you to pay more than half the costs of maintaining the home. Obviously two people living in the same dwelling cannot both pay more than half. In your outline above, only one of those people would be allowed to claim head of household for tax purposes...You also incorrectly assumed that "ALL expenses for their own children, etc." are calculated. Actually most expenses are exempt. For example: education, clothing, medical expenses, transportation costs, etc...cannot be factored in. Food, utilities and rent are considered a single expense by the IRS and count towards the cost of "maintaining a home". Obviously only one of your roommates would be able to pay more than half of those expenses..That lucky person gets to claim "head of household". Remember: a household can only have one head!!