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In re Watson: Homestead Abandonment
In re Watson: Homestead Abandonment
In re Watson: Homestead Abandonment
In re Watson: Homestead Abandonment
In re Watson: Homestead Abandonment
In re Watson: Homestead Abandonment
In re Watson: Homestead Abandonment
Judge Brian Kruse’s recent opinion in In re Watson is poised to become the go-to authority on homestead abandonment in Nebraska bankruptcy cases. 🏠The Story Behind the Case
- Debtor buys home in Omaha before marriage.
- Marriage deteriorates; wife files for divorce.
- Debtor moves out during separation, living in hotels, campsites, and eventually renting a house with his new girlfriend.
- State divorce court orders the home to be sold.
- Debtor moves back into the home after wife vacates.
- Debtor files Chapter 7 bankruptcy and claims a homestead exemption.
- Creditor objects, arguing the home was abandoned.
- The agreed value of the home was $320,000 and it was subject to a mortgage lien of $135,220. Thus, the home has $176,780 of equity.
- The Nebraska homestead exemption grants each natural person $120,000 of homestead exemption.
⚖️ The Legal BattleThe creditor, David Hospodka, pointed to a long list of facts suggesting abandonment, but Judge Kruse wasn’t convinced. He found that the debtor never intended to abandon the homestead, maintained ties to the property, and returned before filing bankruptcy. Conclusion: No abandonment occurred. Even if it had, the debtor reestablished residency before filing, which is what matters for exemption purposes.💡 Why This Case Matters
- Strong Defense of Homestead Rights: Temporary absence doesn’t equal abandonment if the debtor maintains ties and intends to return.
- Rooker-Feldman Doctrine Rejected: Federal court can review homestead claims even if the divorce court ordered the home to be sold. Such an order is not inconsistent with the homestead exemption and does not establish abandonment.
- Reestablishment Is Possible: Debtors can reclaim the homestead by moving into the home before filing bankruptcy.
🧨 The Bombshell: Marital Interest Without TitlePerhaps the most explosive takeaway comes at the end of the opinion: Judge Kruse ruled that a non-titled spouse still holds a real, equitable interest in the home. This means title ownership isn’t everything. For bankruptcy purposes, the debtor’s interest is only half the home’s value. This affects Chapter 13 liquidation value, lien avoidance, and exemption calculations.This home had $176,780 of equity and the debtor’s wife was not on the home title. But the Nebraska homestead exemption grants each natural person a $120,000 exemption, and the court rules that the wife did have an equitable interest in the home. Judge Kruse cites two Nebraska cases to support this position:
Parker v. Parker, 681 N.W.2d 735, 744 (Neb. 2004) (“[A] lien of judgment does not attach to the mere legal title where the equitable and beneficial interest is in another.”); Scoular Grain Co. v. Pioneer Valley Sav. Bank, 447 N.W.2d 38, 40 (Neb.1989) (“[A] judgment lien on real estate in the name of the judgment debtor is a lien only on the actual interest of the judgment debtor and is subject to all existing equities whether of record or not.”)
Does it make a difference that the debtor was in a divorce and that the court ordered the home to be sold? That question is not answered, but the cases cited do not seem to limit this concept to divorce cases. 📌 Final ThoughtsJudge Kruse’s opinion in Watson is a powerful opinion on Nebraska homestead law. For Nebraska practitioners, this case is essential reading—and a powerful tool in defending homestead exemptions.
Here’s what we need for our Be Happy meeting
Our Be Happy meeting reviews information the bankruptcy court needs to approve your case. So you can “be happy.”
On this page, I’m introducing Lexria, my virtual file clerk. Lexria gathers the necessary information and bankruptcy required documents.we need for our next meeting. I call our next meeting the Be Happy meeting. At the Be Happy meeting, we review the information that we need to get your case approved. So we can “be happy.”
The necessary information includes you name, address, social security number. A list of your personal and finanial assets. and your budget.
The required documents include credit report, paystubs, bank statements, tax records, and IDs.
Please do not SKIP any questions.
Lexria won’t send your information to me if you leave anything blank. So, put NONE if the answer is none. If you don’t know, put DON’T KNOW. If a question asks for a dollar amount you don’t know, put $999.99. When we talk again, we can discuss.
Try to be accurate on the budget. Usually the budget doesn’t matter much but sometimes it matters a lot.
Lexria won’t send me the bankruptcy required documents until you answer every question.
Please do not sweat the bankruptcy values of your clothes and furniture. But take the time to be accurate on your budget.
Together, We’ll get Your Credit Report.
You have a legal right to get a free one at annualcreditreport.com. But we can save some steps and aggravation if we get one for you. Lexria asks for permission for us to get your credit report.. (Lexria sends you a copy, too.)
We need paystubs and bank statements
Your bankruptcy eligiblity for Chapter 7, and your bankruptcy payments for Chapter 13, depend on your income. (And also on your money in the bank.) You can download paystubs and bank statements and send them to us. Or–for the big banks and big payroll services–Lexria can get them for you. Please let Lexria know how you want to handle that.
OK, Here’s the Link:
Here’s the link to Lexria. She will take you through the steps to gather the neccessary information and bankruptcy required documents. Then Vanessa will set up our second meeting, to go over everthing together.
Fine Print
I’m required to send you these fine-print notices.
This links to the way I calculate your Chapter 7 legal fee. This is the price set by the court for Chapter 13 bankruptcy cases.
Meet Vanessa, my Paralegal.
Vanessa Hill, bankruptcy paralegal, has been with me for twenty-five years. Vanessa will schedule our next meeting as soon as we get all the required documents and necessary information.
Meet Lexria, My Virtual File Clerk
Lexria, is my virtual file clerk. She can’t answer legal questions, but she is really good at getting the necessary informaiton and bankruptcy required documents.
The post Here’s What We Need for our Next Meeting appeared first on Robert Weed Virginia Bankruptcy Attorney.
Inc. is reporting that business bankruptcy filings increased by 30%. The article can be found at https://www.inc.com/melissa-angell/small-business-bankruptcies-surged-30-percent-this-past-year-will-tariffs-accelerate-that/91221717
Michael Hunter of EPIC is quoted in the article as stating that the cause of this increase is a constellation of factors: including higher interest rates, inflation, record debt, and global geopolitical uncertainty. Interestingly, Mr. Hunter also states that bankruptcy filing will continue to rise for the rest of 2025 and 2026.Most small businesses file under Subchapter V (of chapter 11) which is simpler and more affordable than chapter 11. The Subchapter V debt limit is presently $3,424,000.00.-Subchapter V provides a simplified reorganization process with shorter deadlines, such as a plan filing deadline within 90 days of the bankruptcy filing-Subchapter V cases eliminate certain expenses such as no United States Trustee quarterly fees and no creditor committees unless ordered for cause.-Only the debtor may file a reorganization plan in Subchapter V-Subchapter V does not require a separate disclosure statement, reducing administrative burden and costs.-Subchapter V eliminates the "absolute priority rule," allowing owners to retain equity even if creditors are not paid in full, and permits confirmation without creditor class acceptance as long as the plan is fair and equitable.- A Subchapter V Trustee is appointed to assist the debtor and facilitate negotiations with creditors, but does not operate the business.Clients or professionals with questions about business reorganizations or Subchapter V should contact Jim Shenwick, Esq
Jim Shenwick, Esq 917 363 3391 [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!
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