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Saving your house

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The scariest part of filing bankruptcy is losing property that one should not have lost. It doesn’t happen often or to many people, but everyone needs to know how to protect property. Everyone who files bankruptcy gets to exempt a certain amount of things, but not everyone gets to use the same exemptions. Debtors must choose between state or federal exemptions to shield things from the bankruptcy court. But which exemption does one use? Well, that depends on the interaction between a number of complicated federal and state laws.

The US Bankruptcy Code, at 11 U.S.C. 522, requires an examination of whether the debtor was domiciled in the filing state within the last 730 days. Domicile is a legal term that looks to the place where a person calls home. If the debtor was domiciled for the past 730 days in the filing state, then the debtor can use the laws of the filing state or federal law if the filing state allows the use of federal exemptions. Some states do allow the use of federal exemptions, some do not. Do you know which ones do and which ones don’t?

If the debtor was not domiciled in the filing state during those 730 days, then one must look at the last 731 to 910 days. Finally, bankruptcy law requires homeowners to look at homeownership during the last 1215 days to determine how much value can be protected in a house [that serves as one’s principal residence]. If this already sounds complicated, it is, so don’t expect an amateur to come up with the right answer. But this is just a start.

The law of each state and territory can affect the outcome if the debtor no longer resides in the state whose exemption laws are used. And the exemptions might not cover property that is not located in that state. This analysis applies to every case, even a case that debtor thinks is simple. If the correct exemption is not claimed, the property can be taken and sold to pay creditors. An experienced bankruptcy attorney will know how to determine which exemptions apply. Before you file bankruptcy, make sure your property is protected by the correct exemption.

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg, and the Tampa Bay area.

If you would like more information on our practice, please consult our website at or call 727-335-7151.