Is My Parents’ Home Exempt in My Florida Bankruptcy?
Filing for bankruptcy can be a daunting process, especially when you own a portion of a property that is not your primary residence. If you are considering filing for bankruptcy in Florida and own a portion of your parents’ home but do not live there, you may be wondering whether the property is exempt from your bankruptcy case.
In this article, we will explore the rules around exemption of property in Florida bankruptcy cases and whether your parents’ home is exempt when you are on the deed to your parents’ home.
Understanding Florida’s Homestead Exemption:
- Florida is known for having one of the strongest homestead exemptions in the country, which allows homeowners to protect their primary residence from creditors in bankruptcy. In Florida, the homestead exemption is generally unlimited for properties that are less than half an acre within a municipality or 160 acres outside a municipality. However, the exemption only applies to a debtor’s primary residence – the place where the debtor lives and intends to remain.
Your Share of Ownership Matters:
- If you own a portion of your parents’ home and it is not your primary residence, your share of ownership will determine how the property is treated in your bankruptcy case. Under Florida law, your interest in the property will be considered part of your bankruptcy estate and subject to liquidation if it exceeds the exemption limit.
The Type of Bankruptcy Matters:
- The type of bankruptcy you file will also determine how the property is treated. In a Chapter 7 bankruptcy, the bankruptcy trustee may sell your interest in the property to pay off creditors. In a Chapter 13 bankruptcy, you may be able to protect your interest in the property by proposing a repayment plan that pays back creditors over a three to five-year period.
Planning Ahead is Key:
- If you own a portion of your parents’ home and are considering filing for bankruptcy, it is important to plan ahead. Talk to your bankruptcy attorney and your parents about your options. You may be able to transfer your interest in the property to your parents before filing for bankruptcy or work out a repayment plan that allows you to keep your interest in the property.
In Florida, the homestead exemption only applies to a debtor’s primary residence, which means that if you own a portion of your parents’ home and it is not your primary residence, your share of ownership will be subject to liquidation in bankruptcy. However, planning ahead and working with your bankruptcy attorney can help you explore your options and potentially protect your interest in the property.
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- United States Courts – Bankruptcy Basics: https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics
- Florida Constitution – Homestead Exemption: http://www.leg.state.fl.us/Statutes/index.cfm?Mode=Constitution&Submenu=3&Tab=statutes#A7S06