With home ownership and rental costs on the increase, many people are choosing alternatives such as residing in a mobile home, RV or houseboat. When it comes to filing for bankruptcy we always need to analyze if your property is exempt from the trustee. Ordinarily anything recreational such as an RV, boat, jetski, etc. would be considered a luxury item that would not be exempt.
Florida law has established certain criteria for determining if an RV or boat qualifies as homestead. There is a six-prong test used by the courts to determine the abode is exempt:
Debtor’s intent to make a non-traditional abode his homestead.
Whether the debtor has no other residence.
Whether evidence establishes continuous habitation. Are you going back and forth between a house up north then coming back and using the RV temporarily or is it a permanent home?
Whether the debtor maintains a possessory right associated with the land establishing a physical presence. For example, renting a lot to keep the RV parked.
Whether the non-traditional abode has been physically maintained to allow long-term habitation verses mobility. Is the RV taken on vacations or is it parked and set up with utilities.?
Whether the physical configuration of the abode permits habilitation. If it is set up for full-time use for example, it has a bathroom, kitchen, etc.
Florida has a specific exemption for mobile homes. Please reach out if there is any question on whether your property is exempt.
If you have been living in Florida for over 2 years, the homestead exemption can be used as long as there is less than $189,050 in equity for each person filing. For example, if there are two married people filing a joint bankruptcy, then you can double the exemption amounts so that amount would be less than $371,100 in equity you would be allowed to protect. You can have unlimited equity in your home if you have owned it for 1215 days prior to filing your petition.
This includes another home if you have bought and sold another homestead property within those 1215 days. Typically, this is not an issue since the home equity is usually lower than the allowed statutory amount. If you have moved from another state in the last 2 years, we cannot use the Florida exemptions and would have to perform an analysis on which exemptions apply. Some states allow non-residents to use their exemptions. Other states will require non-residents to use federal exemptions. Most states would not allow you to exempt property in Florida after you have moved from another state.
You must also be residing in your home to be able to claim homestead exemption. The homestead exemption would not protect or apply to an investment property or a property where you are on the deed but are not living in the residence. There are exceptions if you are away from your home temporarily but have full intention of returning. Some examples are being away for medical treatment or being active duty in the military. As long as you intend to return to your home and you are not renting out the property, it can continue to be exempt as your homestead.