Debtor Maintains Homestead During Four Year Absence

I often get questions about abandonment of a Florida homestead. People ask whether they can move from their Florida homestead to live in another state and still maintain creditor protection of the Florida residence under the Florida homestead protection. A recent bankruptcy case considered a debtor who moved from her Florida home to another state for several years prior to filing bankruptcy and claimed her Florida property as exempt homestead on her bankruptcy petition. The court held that under the facts of the case the debtor had not abandoned her Florida homestead even though she had not resided there for several years.

The debtor owned and occupied a homestead property in Key West. In 2003, she moved to California with her children to pursue a romantic relationship. She rented the Key West property for income to carry the mortgage. After the relationship ended she stayed in California and moved in with friends; later, she leased an apartment on a month to month basis. Her children enrolled in California schools. The debtor filed bankruptcy in 2007, four years after moving to California.

The court held that these and other facts indicated that the debtor did not intend to abandon the Florida homestead. The court found that this debtor did not establish a permanent place of residence in California by living with others and in short-term rentals. Her renting of her Key West home did not by itself show an intent to abandon the property as her home.

The case illustrates the legal principal that Florida residency and homestead are based on the owner’s demonstrated intent rather than hard and fast rules about time of occupancy or time of living away from the homestead. As long as the debtor intends to maintain the Florida residence as their home they can maintain homestead protection during a temporary absence which is this case lasted four years prior to filing bankruptcy. The case is : In re Lloyd 07-13502

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