By Barry A. Nelson & Kevin E. Packman
Think twice before flying south to exploit favorable homestead and bankruptcy laws. Case law and proposed bankruptcy reforms may clip a few wings.
People should think carefully before deciding to move to Florida to take advantage of the state’s favorable asset protection laws. Attorneys and advisors need to have some understanding of the potential traps clients may fall into as they try to benefit from the Florida homestead exemption.
Creditors have been successful in forcing the sale of a homestead, with the sales proceeds allocated between the debtor homeowner and his creditors as well as in attaching a homestead through a lien.
To uproot a family during a time of financial stress is difficult, but to do so only to discover the anticipated benefits are nonexistent is devastating. So carefully plan and consider all risks before making the move to this so-called “debtor’s haven.”
