In re Rolle, a bankruptcy judge decided that, even though the owner husband was not living at the homestead, the homestead was still protected from his creditors.
In 2013 prior to their marriage, Rolle (the “Debtor”) and Wife purchased a home (the “Homestead”) in Lee County and titled the property as joint tenants with right of survivorship.They subsequently married, had a child and then separated in 2019. Debtor lived outside the Homestead in a rental house. Wife and child lived continuously at the Homestead. In November, 2020 Debtor initiated a dissolution of marriage but no order was ever entered. While Debtor and Wife were married a creditor recorded a judgment against Debtor.
Debtor filed a Petition for Bankruptcy on June 9, 2021 (“Petition Date”) and listed the Homestead as exempt from creditors. The issue was whether the Debtor’s interest in the Homestead was protected from the creditor’s lien.
The creditor claimed the Debtor could not claim the Homestead as exempt because the Debtor vacated the Homestead prior to the date the judgment was recorded. Debtor took numerous actions between 2019 and 2021 evidencing his intent to live somewhere else and Debtor did not live at the Homestead on the Petition Date.
The bankruptcy judge determined that the lien did attach to the Homestead because Debtor owned the Homestead before the lien attached. To avoid that lien, the Debtor then had to prove that the lien impaired an exemption to which he would have been entitled under Florida law. Debtor argued he never abandoned the Homestead and since 2014, his wife and child lived there continuously. The Bankruptcy judge cited Article 10, Section 4 of the Florida Constitution noting that exempt property includes a homestead…. “if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family.” (emphasis added).
The bankruptcy judge also determined that there was no evidence that either the Debtor or his family abandoned the Homestead.
Because the owner’s family resided at the Homestead, the Homestead exemption inured to the Debtor. The bankruptcy judge found that Wife and child lived at the homestead continuously since 2014, Wife and child lived at the Homestead on the Petition Date, Debtor currently lived with Wife and child and neither Debtor nor his family abandoned the homestead. Thus, the judgment was avoidable under bankruptcy law.
ADVICE: Carefully read the Constitution and the probate code as to homestead status. It appears that abandonment is a high hurdle to overcome if the debtor or his family lives in the homestead.
WORD OF THE WEEK: A judgment lien on personal property in Florida is filed with the Florida Department of State. Filing with the Department of State serves as public notice that the creditor (the person who won the judgment) has a monetary judgment placed against the debtor (the person who owes the money).
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