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In the recent case of Guillermo A. Morales, Case No. 07-16284-BKC-RBR, (Bankr.S.D.Fla. January 2, 2008)(Ray, J.) the Bankruptcy Court was given the opportunity to interpret new section 222.25(4), Florida Statutes which allows a debtor to exempt personal property not to exceed $4,000 if he does not "claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution." Based on the particular facts of the case, the Court held that the debtor had not proven that he had not received the "benefits" of the homestead exemption and the trustee's objection to the debtor's exemption under section 222.25(4), Florida Statutes was sustained. But the court did state that if a debtor properly abandons his entire interest in his homestead at the start of a case or and does not claim his homestead exemption or does so by proper subsequent schedule amendments, then he would be able to claim the $4,000 section 222.25(4) personal property exemption.
In his chapter 7 schedules, the debtor listed one piece of real property with two mortgages. He did not claim the real property as exempt in his schedule C. In his original statement of intentions, the debtor set forth his intentions to reaffirm the two mortgages. Later he filed an amended statement of intentions where he indicated that his intentions were to surrender the real property to one of the mortgagees and reaffirm [sic] the other mortgage. The debtor claimed the use the $4000 personal property exemption under section 222.25(4), Florida Statutes (2007) and the trustee filed an objection to this claim of exemption.
The issue before the court was the meaning of section 222.25(4)'s phrase "receive the benefits of a homestead exemption." The trustee argued that the debtor was not eligible for the section 222.25(4) exemption as by owning a homestead, the debtor receives the benefit of the homestead exemption whether or not he makes use of it. The debtor contended that he had abandoned his interest in the real property, had not claimed it as exempt in his schedule C, and was not receiving any "benefits" of a homestead exemption.
The court looked to the language of the statute and found that it was written in the present tense. The court stated that the fact that a "debtor may have claimed or received the benefits of a homestead exemption in the past would appear to have no bearing on the application of the statute to a debtor's present situation." The court reasoned that even if a debtor had in the past received the benefits of the homestead exemption, he would qualify for the $4,000 section 222.25(4) personal property exemption if he does not claim it [the real property] as exempt and ceases to receive the benefits of a homestead exemption.
The court noted that in this case, that although debtor did not claim the homestead exemption, it was not clear whether he had derived any "benefits" from the exemption. The debtor argued that his amended statement of intentions to surrender the real property constituted an "abandonment" of the real property and that he was no longer receiving any "benefit" of the homestead exemption.
The court stated that the debtor was correct in his statement that under Florida law, abandonment of a homestead is one way that the protection of the homestead exemption may be lost. However, the court concluded that the debtor had failed to clearly indicate his intention with respect to the real property and that the court could not conclude that he had abandoned his homestead. The court noted that at the beginning of the case, the debtor had filed a statement of intentions indicating his intention to reaffirm the mortgages and retain the real property. The debtor only later changed his mind. The court also found "incompatible" with an abandonment the debtor's stated intention in his amended statement of intentions to surrender the real property to only one of the two mortgage holders and reaffirm the debt owed to the other mortgage holder.
Although the court failed to find an abandonment of the homestead in this case which led to the court's denial of the debtor's claim of exemption under section 222.25(4), the court stated that if a debtor "properly abandons his entire interest in his homestead at the start of a case and does not claim his homestead exemption" then he would be able to claim the $4,000 section 222.25(4) personal property exemption. The court even left open the possibility of a subsequent amendment of the debtor's schedules to indicate an abandonment of all interest in his homestead and to claim the $4,000 section 222.25(4) personal property exemptions.
In this case, the court found that the debtor failed to clearly indicate his intentions with respect to the real property and was denied use of the section 222.25(4) exemptions. Since the rendering of the court's decision, the debtor filed an amended statement of intentions setting forth a surrender to both mortgagees and has moved the court for a rehearing. In his motion for rehearing, the debtor refers to this amended statement of intention and points out that he did not oppose the motion for stay relief filed by one of the mortgagees.(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
On May 31, 2013, the Florida Fifth Circuit Court of Appeals issued it decision in the case of Zlatkis v. All America Team Concepts, LLC upheld the validity and enforcement of spendthrift trusts. In this case, a judgement holder attempted to enforce its judgment against the debtor's interest in a spendthrift trust.
The Court explained that spendthrift trusts are created with the intention of providing a fund for the maintenance of another and at the same time securing it against the person's own improvidence or incapacity for self-protection. Croom v. Ocala Plumbing & Elec. Co., 57 So. 243, 244 (Fla. 1911). The Court further explained that a valid spendthrift clause prevents the beneficiary of the trust from transferring his interest in the trust as well as prevents creditors from reaching any of the trust's funds until they are dispersed to the trust beneficiary. It further noted that spendthrift provision have long been recognized as valid under Florida common law and that sections Florida Statutes sections 736.0501 - 736.0507 additionally provide for the enforcement of spendthrift trusts.
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
On June 27, 2012, the Florida Second District Court of Appeals issued its decision in Geraci v. Ems, 93 So. 3d 384 (Fla. 2nd DCA 2012). The issue before the Court was whether a person's long-term leasehold interest in his condominium could qualify as a "homestead" exempt from forced sale under article X, section 4 of the Florida Constitution. The lower Court held that it could not qualify as a homestead as it was not a fee simple interest. The Court of Appeals reversed and held that such a condominium may qualify as a homestead.
The Court of Appeals explained that article X, section 4 of the Florida Constitution does not distinguish between the different kinds of ownership interests that are entitled to the homestead exemption against forced sale. Cutler v. Cutler, 994 So. 2d 341, 344 (Fla. 3d DCA 2008). The Court reviewed that the Florida Supreme Court "has long since adopted the general rule that a fee simple estate is not necessary to this exemption." Bessemer Props., Inc. v. Gamble, 158 Fla. 38, 27 So. 2d 832, 833 (1946). The Court further stated that any beneficial interest in land" may entitle its owner to the homestead exemption. In determining a homestead, the Court noted that a court must instead focus on the debtor's intent to make the property his homestead and his actual use of the property as his principal and primary residence.
The Court held that when a lessee's interest in a leasehold estate includes the right to use and occupy the premises for a long-term and the lessee uses the property as his principal and exclusive residence, such an interest is entitled to the Florida homestead exemption from forced sale.
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
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Allison Mathis, the ex-girlfriend of Miami Heat star Chris Bosh files bankruptcy protection. She is the mother of a 5-year old child fathered by Bosh. She reportedly receives child support payments from Bosh for their child in the amount of $3,000 a month, but many may see this as mere pennies since the NBA star […]
Much of my practice today consists of consulting with clients who are interested in saving their real estate from foreclosure using Chapter 13 of the Bankruptcy Code. The discussions breakdown into two different categories - real estate that is used as a principal residence and real estate that is not used as a principal residence.
The typical principal residence in South Florida today has two mortgages -- what they used to called 80-20 mortgages. That is, two mortgages with the first mortgage in a amount of 80% of the value of the home and the second in an amount of 20% of the value of the home. As most real estate values in South Florida have dramatically declined, the homeowner is "upside-down" or "underwater." For example, $400,000 is owed on the first mortgage and $100,000 owed on the second mortgage and the real estate is now valued at $375,000. Upon the filing of the appropriate motions in Chapter 13, the Bankruptcy Court may hold that the second mortgage is wholly unsecured by property and therefore is an "unsecured claim" and its mortgage lien "avoided". An order is obtained from the Bankruptcy Court and recorded in the county public records to evidence that the mortgage lien has been avoided. It should be noted, that as to a principal residence, the second mortgage must generally be wholly unsecured in order to be avoidable. That is, there cannot be even one dollar of collateral value to secure its claim. But is it possible that the holder of the second mortgage might reduce its mortgage by agreement due to today's market conditions. In chapter 13, the first mortgage on a principal residence is generally not modifiable, although a homeowner is free to try to reach a voluntary modification with the mortgage company.
The rules are different as to non-principal residential real estate property or investment real estate. As with principal residential property, second mortgages can be wholly avoided. But in addition to being wholly avoided, second mortgage on non-principal residential property can be partially avoided or "stripped down". Usually though in today's market there is no difficulty in wholly avoiding a second mortgage. Although most first mortgages on principal residential real estate cannot be modified in Chapter 13, first mortgage on non-principal residential real estate may be modified. For example, take an investment property valued at $100,000 with a $150,000 first mortgage and $50,000 second mortgage. The second mortgage would be held as wholly unsecured and avoided. The first mortgage could be avoided to the extent the first mortgage exceeds the value of the property in the amount of $50,000. The question would then be how the remaining $100,000 first mortgage would be paid off. There are a few alternatives under the Bankruptcy Code and there are further alternatives that may be reached by agreement with the mortgage holder. The mortgage holder may be especially amenable to an agreement in today's market. One alternative may be to pay interest only on the $100,000 - for say four years - with the property to be sold or refinanced before the four years is over. Another would be to reamortize the the $100,000 secured claim mortgage at a new interest rate over fifteen to thirty years.
We are in a unique situation in South Florida today and the case law and procedures for addressing mortgages in Chapter 13 is dynamic, especially as to non-principal residential mortgages.(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
A member of the Outlaws Motorcycle Club was recently sentenced to several years in prison for their involvement in an illegal organized scheme in Indiana. Jamie Bolinger, also known as Jammer, 36, of Martinsville, Indiana was sentenced to 102 months in federal prison after he pled guilty to a slew of offenses including extortion, drug […]
Many prospective bankruptcy filers in Oregon are understandably concerned about the privacy of their filing. At least once or twice a year someone chooses to come in for a consultation with our firm because we have offices in four different cities. I guess the thought is I can meet these guys in Portland where I live, but they can file my bankruptcy in Salem where no one knows me. We can’t.
The good news though is it really doesn’t matter where we file because no one that matters is really going to find out. Filings are posted in the paper, but you really need to ask yourself, how much time do you spend poring over bankruptcy filings? The answer is that you haven’t and that you probably wouldn’t know where to look. In Portland, like most cities, the bankruptcy court doesn’t pay for bankruptcy filing posting in a major paper, like the Oregonian or even the Willamette Week. Filings are posted in the Portland Business Journal which has a circulation of about twelve and doesn’t have an online classified section. What about online?
In both Oregon and Washington, bankruptcy filings can be found online, but only if you have an account with the court’s search system and pay the eight cents per page for downloads.
Granted your bankruptcy filing will show up on your credit report for a period of time, though it will likely have only a fleeting impact on your actual credit score, but unless someone has a permissible purpose for obtaining a copy of your credit report, your secret is safe with Experian and Equifax. Frankly even the people who will have a permissible purpose for obtaining your credit report aren’t likely to read it. Your prospective car lender, doesn’t care about your history or your bankruptcy filing, he cares about your score.
The fact is bankruptcy lost its stigma a long time ago while being in debt has retained all of its negative connotations. I have been filing bankruptcies for almost fifteen years now and I have yet to have a single client come into our Portland or Salem, Oregon offices with a horror story about how the wrong people found out about their bankruptcy.
The original post is titled Who’s Going to Find Out About My Oregon Bankruptcy Filing? , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
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