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Does Debtor Who Files Bankruptcy After Moving From Florida To Another State Claim Florida Exemptions?
I would appreciate anyone’s thoughts on the following questions posed by a bankruptcy attorney in Kentucky. The attorney represented prospective bankruptcy debtors who moved to Kentucky from Florida within the past two years. Under the new bankruptcy law, they are ineligible to use Kentucky exemptions because they had not resided in that state for two years. The last state where they lived for two years was Florida. The attorney concluded that Florida exemptions would apply to his Kentucky case, except for one issue. He asked me whether a person has to be a resident of Florida to be eligible for Florida’s exemption under a Florida statute or the Florida constitution. If so, his clients, now Kentucky residents, could not use Florida exemptions and would file bankruptcy under federal default exemptions.
Only Florida residents can file bankruptcy in Florida. Any of my clients who filed bankruptcy, being Florida residents, were eligible for Florida exemptions in bankruptcy. I never have had to determine whether a person had to be a Florida resident to claim Florida exemptions because I never did, or could, file a bankruptcy in Florida for a non-resident. I cannot find any provision of the Florida statutes that specifically states that only Florida residents are protected by Florida’s exemptions. Clearly, only Florida residents can claim homestead protection of the Florida Constitution because the definition of homestead is one’s place of residence, and if your homestead is in Florida you are a resident of Florida.
I do not know the answer to the question facing the Kentucky attorney. If a reader knows authority that supports the position the person filing bankruptcy in Kentucky cannot take Florida exemptions and is under federal bankruptcy exemptions, please send me an email. Thanks.
posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida.
November 15, 2006 in Bankruptcy Questions | Permalink
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Comments
A Florida statute that seems to address the exemption issues is Chapter 732.401 (1) of the Florida Probate Code. It states "If a decedent was DOMICILED in this state AT THE TIME of death . . . have a right to a share of the estate . . . to be designated "exempt property". I'm going to take this as meaning that you have to be domiciled in Florida in order to avail yourself of the Florida exemptions. . . .
Posted by: Jeanne Morales | Nov 20, 2006 10:43:25 PM
Jon-This question as to various states has been kicked around and "bully pulpited" (if there is such a word) on the NACBA listserve for many months. As a board certified consumer bankruptcy attorney praticing exclusively consumer bankruptcy for 20 years my thoughts are as follows.
First read the Arispe and Goldsmith decisions from the SD Florida from a few years ago which held that a non-domiciliary of any state but who resides in Florida is allowed to claim the Federal exemptions. This is not the main relevant polint for our discussion--the main point is the Court's method of analysis---ie. start with and follow the bankruptcy code's framework.
Now recently the author of one of these two decisions, Judge Mark, remarked at a seminar that it may be that the framework of the code makes the debtor a "constructive" or in his words "artificial" domiciliary of the prior state. If the person is thereby a domiciliary of such state, you may not even have the question you posed.
In any event, I don't think I've ever run across Florida law that states that one must be a resident or domicile of Florida to claim the Florida exemptions outside of bankruptcy. But I would point out, that Am Jur 2nd, seems to state that the general rule is that one must be a resident of the state to use such states exemptions.
It may be many years until a court rules on this question--just as it took 20 years until finally obtained the Arispe and Goldsmith decision--until then the attorneys and trustee thought that if one was a resident of Florida but not a domiliciary as one didn't have a "green card", that one didn't get any exemptions!!!
Posted by: Jordan E. Bublick | Nov 18, 2006 5:58:56 PM
