Will I Be Able To Keep My House If I File For Bankruptcy In The State Of Florida?
Linda Lee Wynn, Esq., Julian Credit Management - October 29, 2004

One of the biggest concerns for individuals contemplating filing for bankruptcy is whether they will be able to keep their home.
Generally, if the equity in the home is exempt and the individual (s) can continue making the regular monthly mortgage payments then they will be able to keep their house.

If you file in the state of Florida and the property is located in Florida and you live in the home at the time of filing the bankruptcy then the property will generally be deemed as exempt and you will be able to keep your home. This protection extends to single-family homes, condominiums, manufactured and mobile homes (unless the mobile home is not stationary).

While there is no limit as to the dollar value of a homestead that you can exempt in Florida, the exemption is limited to a certain area of land. Pursuant to the Florida Constitution Article X Section 4, the homestead exemption is limited to a half acre (plus improvements) in the city and 160 acres (plus improvements) outside the city.

In order for the homestead exemption to apply to a particular piece of property, the debtor must be a Florida resident and the homestead must be his or her primary place of residence. If the property is purchased for use as a future residence it will not qualify for the homestead exemption. Further, a second home, rental property or investment property will not be exempt as homestead and will become property of the bankruptcy estate. A husband and wife cannot protect two different properties by claiming separate homesteads.

Often, the question arises as to whether a property can be claimed as exempt in bankruptcy if due to oversight or other legal technicality, the property has not been claimed exempt as homestead for purposes of the homestead tax exemption. While claiming the property exempt as homestead for the purpose of taking advantage of the tax laws is evidence that the individual's property is in fact his or her homestead, the failure to file for the homestead tax exemption under Florida law does not defeat the individual's right to protect the his or her homestead under bankruptcy law if the other conditions of homestead determination are met.

Even if the property is exempt from the bankruptcy estate, it is important to know that a bankruptcy discharge will discharge your personal liability for any note that you may have signed in connection with any loans that you have obtained for the purchase of your home or any home equity loans etc. that you may have taken out in connection with your home. The bankruptcy discharge does not remove voluntary liens on your property such as mortgages and therefore the mortgage lender still has its rights to foreclose on the property if you get behind on your payments.

If you are behind on the payments and you wish to keep the house, you will need to get current on the payments prior to filing a Chapter 7 Bankruptcy or you will need to consider filing a Chapter 13 Reorganization. A Chapter 7 Bankruptcy will not save your home if you are behind on your mortgage payments or if you become delinquent after filing the Chapter 7. A Chapter 13 Reorganization will allow you to cure the back payments over a three to five year period and will help you to keep your home. You will be responsible for making your current mortgage payments as well as a payment to the Chapter 13 Trustee . It is imperative that you file the Chapter 13 Case prior to any Foreclosure Sale date on your home in the state of Florida otherwise, you will lose your home in foreclosure. It is highly recommended that if you are served with foreclosure papers that you seek legal counsel as soon as possible in order to protect your rights.

In conclusion, the homestead exemption laws are extremely liberal in the state of Florida and therefore if the property is your primary residence and you are a resident of the state of Florida you will most likely be able to keep your home in a Chapter 7 Bankruptcy. If you are not current on your mortgage payments, you may be able to save your home from foreclosure by considering the filing of a Chapter 13 Reorganization.

Julian Credit Management is a firm that practices exclusively in the area of Bankruptcy and Debt Consolidation and has offices in Clearwater (Pinellas County), Port Richey (Pasco County), Tampa (Hillsborough County), Lakeland (Polk County) and Orlando (Orange County). We represent persons throughout the State of Florida.

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