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Bankruptcy News

Author johnbsims3
Admin 

#1 - Posted: 18 Oct 2006 20:29 
Bankruptcy News Flash:
One of the first bankruptcy opinions on the new law which took effect October 20, 2005 is In re McNabb (Case No. 0-05-07495-RJH, Arizona). In interpreting the new bankruptcy law's homestead provisions, an Arizona bankruptcy judge ruled that the $125,000 homestead limitation afforded to bankrupt debtors who acquire their property within 40 months of filing bankruptcy is not applicable in states like Arizona, or Florida due to the fact that those states have "opted out" as a matter of state law, the exemptions afforded by federal bankruptcy. Based on this court decision, it may be that a resident of Florida who files bankruptcy under the new law, regardless of when he purchases his Florida homestead, may still enjoy unlimited homestead protection under the Florida Constitution providing the claim is made. The judge stated that the new bankruptcy law regarding homestead and exemptions only affect those who file bankruptcy and who claim exempt property under the laws of their state rather than the federal law regarding bankruptcy exemptions. Since Florida law allows bankrupt debtors in Florida to "opt out" of the federal exemptions, the court ruled that no debtor in Florida could elect state exemptions as the election has already been made by Florida lawmakers. This decision may not be binding on Florida bankruptcy courts, but the ruling and the decision may be able to be used to set precedent in Florida. If this ruling is adopted by Florida bankruptcy courts, it should stop most fears of debtors being forced into involuntary bankruptcy in order to remove and alienate them from Florida's homestead protections. Read the entire synopsis and case opinion HERE http://www.netside.net/~c3i/bankruptcy.htm

The problem for Florida is that a Florida bankruptcy judge has ruled in direct conflict with the Arizona judge. This means that the opt-out provisions of the BR Code do not apply to Florida. Read the entire opinion HERE at http://www.netside.net/~c3i/bankruptcy.htm

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