May be able to protect their home…Even with a Bankruptcy - Posted by Michael Morrongiello
Posted by Michael Morrongiello on March 04, 2000 at 21:33:04:
Depending on which state the home is located in and that states interpretation of the bankrupcty code one may be able to protect their “homestead” residence.
For instance in Florida at least recently when filing either a Chapter 7, or 13 a debtor was able to elect to “exempt” their personal residence or homestead property from creditors.
Many savvy debtors who were having financial problems (former Baseball commissioner Bowie Kuhn, convicted inside stock trader Paul Bilzerian are examples) liquidated their assets and converted them to cash which they then then used to Purchased expensive residences in Florida. They then moved into these homes which in some cases were debt free and then declared them their “constitutional homesteads”. Then they declared Bankrupcty in Florida.
Now with lots of equity in their homes, and living in their expensive Florida home their homestead became immune from creditors. Florida was called “Debtors Paradise” as a result.
My advice is to seek counsel from a bankruptcy attorney who specializes in the arcane and sometimes mysterious laws created in and for bankrupcty court in your particular state.