Taking Florida Exemptions to Another State

A debtor has to file bankruptcy in the state where he resides at the time of filing his petition. Under the new bankruptcy law a debtor must reside in a state for two years before the debtor is eligible to use the exemptions available to citizens filing bankruptcy in that state. For example, a Florida resident who files bankruptcy within two years after moving to Florida from Georgia has to file in Florida using the bankruptcy exemptions under Georgia law. The reverse is not always true. For instance, a person sells his exempt Florida homestead and moves to Georgia where he buys a new homestead. Within two years of moving to Georgia the same person files bankruptcy in Georgia. The issue is whether the Georgia debtor can take advantage of Florida bankruptcy exemptions including Florida’s unlimited homestead protection.

In this example, the Georgia debtor probably cannot avail himself of Florida exemptions after moving to another state and filing bankruptcy within two years. Florida law applies Florida’s property exemptions only to residents of Florida. The day a person relinquishes Florida residency he also gives up Florida’s creditor protections in and out of bankruptcy. A bankruptcy court ruled in the 1989 case of In re Schulz that a person who has to file bankruptcy in another state after leaving Florida but prior to qualifying for the exemptions of the new state of residence may claim the default federal bankruptcy set of exemptions provided under Section 522 of the Bankruptcy Code. Other than Florida’s homestead protection, the federal exemptions are generally more liberal than Florida exemptions.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida.