Florida Ch7 exemption questions.

[jbrt]

New member here.

The wife and I are considering filing Chapt. 7 jointly.

Here's our questions...for now anyway..

1. Florida related...I've seen something regarding if you choose to inlcude your home/homestead in your BK, then your personal property exemption goes from $1000 to $4000? correct-clarification?

2. How do they determine value on vehicles. Particularly in regard to equity going toward the personal propety exemption? Trade-in, Retail? We have two vehicles, neither are paid for, but, both are newer and have good warrenties. We'd like to keep them in lieu of the junkers with no warrenty we'd have to settle with and keep repairing every week out of pocket for who knows how long if we let them go. After discharge, the payments won't be a problem. They're actually very low...less than $400 a month for both combined. We're concerned with one...as if they go by retail, there's equity, if it's trade-in, no problems with either car.

3. Both vehicles are soley in my wife's name...loans and all. Will that create any problems? We've been told that they will only allow you to keep one vehicle. Myth or truth?

4. Finally, for now again anyway, how does it work with income in the bank? For example, right now we have nada. But, if we're going to let the house go, then we need to start putting the $$ we've been killing trying to keep up into putting some money away to rent, 1st mo.,deposits..etc. That could come to a couple thousand $'s. Is that a problem while filing?

I'm sure we'll have more questions as we get more into this, just the first few we have that keeps us awake at night before we even get started.

Thanks

[StartingOver08]

New member here.

The wife and I are considering filing Chapt. 7 jointly.

Here's our questions...for now anyway..

1. Florida related...I've seen something regarding if you choose to inlcude your home/homestead in your BK, then your personal property exemption goes from $1000 to $4000? correct-clarification? You actually get the $4000 plus $1000 for a vehicle exemption for a total of $5000 in exemptions PER FILER. So for the two of you, you would have $10,000 if you file together.

2. How do they determine value on vehicles. Particularly in regard to equity going toward the personal propety exemption? Trade-in, Retail? We have two vehicles, neither are paid for, but, both are newer and have good warrenties. We'd like to keep them in lieu of the junkers with no warrenty we'd have to settle with and keep repairing every week out of pocket for who knows how long if we let them go. After discharge, the payments won't be a problem. They're actually very low...less than $400 a month for both combined. We're concerned with one...as if they go by retail, there's equity, if it's trade-in, no problems with either car.In my district of Fl (Southern District) the Trustee uses NADA Retail value. However, there is some good news - the Middle district of Fl has started to allow you to use a valuation from a dealership, like CARMAX, and of course that is much lower than retail. So you may not actually have any equity in your vehicles!

3. Both vehicles are soley in my wife's name...loans and all. Will that create any problems? We've been told that they will only allow you to keep one vehicle. Myth or truth?Myth. You can keep one vehicle per filer (driver) at least. I was allowed two vehicles, my husband did not file, but I had both vehicles in my name only and was allowed to keep both. Ultimately I surrendered one, but that was because the bank would not negotiate on the reaffirmation. But it was no issue at all in the 341.

4. Finally, for now again anyway, how does it work with income in the bank? For example, right now we have nada. But, if we're going to let the house go, then we need to start putting the $$ we've been killing trying to keep up into putting some money away to rent, 1st mo.,deposits..etc. That could come to a couple thousand $'s. Is that a problem while filing? This is the problem with Fl's small exemptions, you have to fit everything in that $10k ($5k ea) - EVERYTHING. So you don't get to keep a lot of cash pre-petition. Of course, after you file you keep all the cash you want. You will have lots of time too - as foreclosures are way backed up so you can save after you file, before you have to move.

I'm sure we'll have more questions as we get more into this, just the first few we have that keeps us awake at night before we even get started.

Thanks

I hope this helps a little bit.

[justbroke]

1. Florida related...I've seen something regarding if you choose to inlcude your home/homestead in your BK, then your personal property exemption goes from $1000 to $4000? correct-clarification?

I think my friend StartingOver08 missed this or you stated it incorrectly.

If you do not claim the homestead exemption in your BK, then your get another wildcard exemption (per debtor) in the amount of $4,000 (F.S. 222.25). You also get the $1,000 (per debtor) wildcard exemption from the Florida Constitution (Fl. Const. Article X Sec. 4).

So, if you do not claim a homestead exemption in your BK... because you have no equity in the home... then you get $5,000 in total wildcard exemptions per debtor. That means, if both spouses file on the same petition, then it's $10,000 in wildcard exemptions.

If you do claim a homestead exemption in your BK... then you get $1,000 in total wildcard exemptions per debtor. That means, if both spouses file on the same petition, then it's $2,000 in wildcard exemptions.

Hope that helps.

[StartingOver08]

Thank you JustBroke - I missed it. I read it as they were giving the home back! Sorry!

[justbroke]

Thank you JustBroke - I missed it. I read it as they were giving the home back! Sorry!

No, you didn't. One could read it both ways. It's the "choose to include your home/homestead in your BK" which can be read two ways.

I just read it the other way.

[fltoo]

Hey JB, remember that thread about maybe getting away with 5000. plus 1000. for car. I was over the 5000. Going to pm you and tell you what happened.

[2Bshinyandnew]

Hey JB, remember that thread about maybe getting away with 5000. plus 1000. for car. I was over the 5000. Going to pm you and tell you what happened.

The caselaw supports stacking the $1000/$4000 personal property exemptions. The $1000 auto exemption can be used for auto only. The $4000 can be used to exempt equity in a vehicle. Of course, that $4000 is only for filers who are not using/do not get the benefit of Florida's generous unlimited homestead exemption (which really only helps wealthy filers )

[PoorGrammyinBK7]

We did not want to claim our homestead because we have no (or even negative) equity, but were told by the lawyer that since we are still living there, we HAVE to claim it and could not claim the wild card. We would have had to move out before filing. That still doesn't sound right, but thats what we were told. Turns out for us that it doesn't matter - our other stuff wasn't worth more than allowed anyway.

[justbroke]

We did not want to claim our homestead because we have no (or even negative) equity, but were told by the lawyer that since we are still living there, we HAVE to claim it and could not claim the wild card. We would have had to move out before filing. That still doesn't sound right, but thats what we were told. Turns out for us that it doesn't matter - our other stuff wasn't worth more than allowed anyway.

That makes no sense. I didn't use or claim the homestead exemption, and own my home and I'm keeping it, and used the $4,000 statutory "unused" homestead exemption.

Your lawyer is interesting... Florida Statute 222.25(4) reads... "A debtor's interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the 1State Constitution. This exemption does not apply to a debt owed for child support or spousal support. "

He may be thinking that your "Homestead Exemption" related to property taxes, under Florida Statute 196.131... which is totally different than the Homestead Exemption under Florida Statute 222.25(4).

Many people make that mistake. Usually not the lawyers.

[2Bshinyandnew]

That makes no sense. I didn't use or claim the homestead exemption, and own my home and I'm keeping it, and used the $4,000 statutory "unused" homestead exemption.

Your lawyer is interesting... Florida Statute 222.25(4) reads... "A debtor's interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the 1State Constitution. This exemption does not apply to a debt owed for child support or spousal support. "

He may be thinking that your "Homestead Exemption" related to property taxes, under Florida Statute 196.131... which is totally different than the Homestead Exemption under Florida Statute 222.25(4).

Many people make that mistake. Usually not the lawyers.

I don't think the lawyer made a mistake. The issue is still bouncing around the courts.

"An Orlando bankruptcy court issued a decision which curtails the personal property exemptions for debtors who own their own residence. The case is In re: James Matthew Franzese, Case No. 07-3944-KSJ. "

http://www.bankruptcyorlando.com/2008/02/florida-court-c.html

[PoorGrammyinBK7]

No - he is one of the most experienced BK lawyers in the area. It was the "receive the benefits" part. He said since we were still living there, we were receiving the benefits. I think he said someone else had tried it and that was what the judge said - can't remember now...

[justbroke]

No - he is one of the most experienced BK lawyers in the area. It was the "receive the benefits" part. He said since we were still living there, we were receiving the benefits. I think he said someone else had tried it and that was what the judge said - can't remember now...

I see now that this is still under litigation and there is no real telling caselaw. My case was a little different. It's that "receives the benefit" thing that they rely on.

That's too bad. Because $1,000 in 1878 is $20,000 in 2007 dollars. They (the legislature) had a chance to fix it, but didn't.

I'm just glad that I was able to use the "unused" homestead exemption, without objection.

Just because it doesn't make any sense to me, doesn't mean it's not the case.

[2Bshinyandnew]

No - he is one of the most experienced BK lawyers in the area. It was the "receive the benefits" part. He said since we were still living there, we were receiving the benefits. I think he said someone else had tried it and that was what the judge said - can't remember now...

In my case, at time of his BK filing my ex and I were still married and he was on the mortgage of the marital home. We had been separated for over 2 years.

Since he was still on our mortgage, the attorney said that on his Statement of Intentions next to where the mortgage was listed he had to check the "property will be surrendered" column. The attorney was very clear on this...if he did not timely state his intention to abandon the homestead property, he would no be able to claim the $4000 exemption. The attorney wanted him to have plenty of documentation proving we have been living apart. It was very important the attorney said to prove that he was not living in the home and intended to abandon his interest in it, otherwise his use of the $4000 exemption would almost certainly be challenged by the trustee.

Justbroke, I'm not sure how you were able to do both, claim the $4000 and keep your homestead property. Unless I misunderstood your post??

[2Bshinyandnew]

I see now that this is still under litigation and there is no real telling caselaw. My case was a little different. It's that "receives the benefit" thing that they rely on.

That's too bad. Because $1,000 in 1878 is $20,000 in 2007 dollars. They (the legislature) had a chance to fix it, but didn't.

I'm just glad that I was able to use the "unused" homestead exemption, without objection.

Just because it doesn't make any sense to me, doesn't mean it's not the case.

Indeed. Florida's generous unlimited homestead exemption means little to the majority who have little/no/negative equity.

[justbroke]

Justbroke, I'm not sure how you were able to do both, claim the $4000 and keep your homestead property. Unless I misunderstood your post??

i think I found my issue. I originally intended to surrender my primary residence. I was keeping the rental unit only, so I claimed the "unused" homestead exemption under F.S. 222.25(4).

However, I changed my mind later after considering the affects of being a landlord with a tenant moving out and having to find a new tenant, which failed miserably.

I do now enjoy my residence, and no one ever questioned my change in position.

I have read the cases where the intent is established upon the filing of the petition. This appears to be a Florida specific issue. I think the legislature got it wrong, but that's just me.

I can clearly see the issue if you intended to keep your homestead, and stated as much in your petition.