Floridian Moves to New York: What Exemptions Apply?

Florida resident moves to New York and files bankruptcy within two years after leaving Florida. What state’s laws apply to his bankruptcy.

The debtor cannot apply New York law because he has not been a resident of New York for two years prior to filing. The new bankruptcy law states you must reside in the state of filing for two years to uses that state’s exemption laws. The statute is designed to stop debtor’s for shopping for preferred forums in which to file bankruptcy.

I don’t think the debtor could use Florida laws even though he had always resided in Florida before moving to New York. Florida Statute 222.20 states that residents of Florida shall use Florida exemptions rather than federal exemptions. Bankruptcy courts have held that only Florida debtors can use Florida exemptions. In re Sanders, 72 BR 124. I think that this debtor would use federal exemptions because he would be ineligible to claim the exemptions from either Florida or New York. Other than Florida’s homestead protection, federal exemptions are generally more liberal under the new bankruptcy law than Florida exemptions.

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