Inherited IRA Exempt in Florida Bankruptcies

When an IRA owner dies and designates an heir, other than his spouse, as the beneficiary of his IRA the beneficiary acquires an “inherited IRA” from the decedent. Federal bankruptcy exemptions protect IRAs up to approximately $1 million. Some bankruptcy trustees have challenged the exemption of IRAs which the debtor inherited from a parent. Recently, the United States Supreme Court ruled that inherited IRAs are not exempt pursuant to the Bankruptcy Code’s exemption of IRA accounts Continue reading

Does Constitutional Homestead Protect Non-Debtor Spouse?

A married man used exempt money from his retirement funds to pay off a $400,000 mortgage on his homestead. Within three years thereafter, the same man filed Chapter 7 bankruptcy. The Chapter 7 trustee is challenging the man’s homestead exemption because he (the debtor) obtained $400,000 equity within 1215 days of filing bankruptcy. Can the man’s non-filing spouse exert her homestead interest to save the house? Continue reading

Homestead Exemption Lost By Leasing Land To Mobile Home

There are several bankruptcy court decisions which considered the debtor’s homestead exemption when the debtor used part of the homestead property to produce income. The general rule is that commercial uses on a homestead property situated within a municipality will disqualify all or part of homestead exemption, but income producing activity does not disqualify homesteads located in the county. Continue reading

Joint Tax Refunds Exempt Entireties Assets in Bankruptcy

Federal courts have permitted the IRS to levy upon a Florida taxpayer’s entireties account to collect taxes owed by one spouse filing an individual tax return. The entireties exemption does not protect the married taxpayer from the IRS. Does it follow that a joint tax refund from the IRS is also not protected entireties property in bankruptcy? Continue reading

Entireties Assets Exempt To Extent Greater Than Unsecured Bankruptcy Debt

Florida common law is that entireties property is exempt from all creditors of either spouse, but it is not exempt from joint creditors. Tenants by entireties property in bankruptcy proceedings has been the subjection of judicial debate over the years when one spouse files bankruptcy, and where the debtor spouse has both individual debts and joint debts with their non-filing spouse. Continue reading

Exempt Disability Income Loses Benefits In Bankruptcy

Disability insurance proceeds, from either private insurance or social security, cannot be garnished by a judgment creditor in Florida, and courts will protect the same proceeds after they are deposited in a debtor’s bank account. That’s the law in state court collections, but treatment of disability income is somewhat different in bankruptcy.

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