A Florida resident wrote a comment asking about the effect of a Florida judgment in another state with a short statute of limitations on judgment collection. Florida judgments are enforceable for 20 years. The reader stated that the other state had a 4 year statute of limitations on collection of judgments. What happens to the judgment if the debtor moves from Florida to the other state?
Continue Reading...On June 16, 2006, I raised the question of whether an unrelated heir can force the sale of the parent's homestead which was devised to three heir when one of the heirs occupied the house. I stated my opinion that the homestead protections of the Florida Constitution would prohibit forced sale of an heir's homestead to allocate the proceeds among the other heirs. Apparently, my opinion was incorrect. A reader referred me to the Tullis case at 360 So 2d 375 which held that courts can order partition of homestead property to allocate value among competing interests in the property.
A man called me concerning collection of an education loan. The caller had defaulted on payment of a large education loan, and the government had turned over collection to a private collection firm and its attorneys. The collection firm threatened to garnish the caller's wages. The caller explained that he supported his spouse and that he was head of household. Initially, I told him that his wages were protected from garnishment by Florida Statutes because of his head of household status. When I looked into the matter further I discovered that there are federal laws and regulations concerning collection of student loan. These laws specifically permit wage garnishment, and they state further, that the governments garnishment rights supercede state law regarding wage garnishment. I found cases in other states which said that the federal government's right to collect default student loans preempted the state's garnishment protections. It would appear that the federal government can garnish the wages of a Florida head of household to collect student loan debt. Please email me if someone is aware of contrary law.
A caller stated that his parent had devised his homestead property 30 percent each to himself, his brother, and 40 percent to an unrelated third party. The brother lived in the property with the parent and continues to live in the property as his primary residence after the parent's death. The caller wanted to know if the unrelated heir can force the sale of the parent's homestead and an allocation of the sale proceeds
Continue Reading...Here's a practical question. An attorney outside of Florida was considering moving to Florida, in part, because of Florida's homestead protection. The attorney read that homestead protection is limited to ½ acre properties inside a Florida municipality. The called asked me how he can determine if a house he is considering buying is in or out of a municipality.
A caller asked about whether a bank account owned by married Florida residents is exempt as tenants by entireties property if the account is in a foreign bank with no United States offices or branches
Continue Reading...Debtor owns house in Georgia, and then moves to Florida where he rents an apartment. He does not sell his Georgia home. A creditor gets a judgment against the same debtor. The debtor seeks to protect his Georgia house on the grounds that as a Florida resident he is entitled to exempt his homestead. Can a Florida resident protect his primary home if it is located in another state, or does the Florida Constitution protect only homestead owned by Florida residents and located in Florida?
Continue Reading...I discussed the following case with a creditor attorney. A debtor loses his house at a foreclosure sale. The foreclosure sale price brings in enough money to pay off the mortgage and provide excess funds of $20,000. The funds are held temporarily in the trust account of the debtor's attorney. Next, the debtor files bankruptcy. The question is whether the excess funds from the sale are exempt.
Florida law protects the proceeds from the sale of a homestead so long as the debtor intends to reinvest the proceeds in a new homestead. No case has distinguished proceeds from a voluntary sale from foreclosure sale proceeds. Therefore, the foreclosure proceeds should be exempt if intended for a new homestead.
The June 1, 2006, Wall Street Journal had an article on "private annuity trusts" in its Personal Finance Section. I have already received inquiries about using private annuity trusts as an asset protection tool in Florida inasmuch as Florida statutes protect annuities from creditors claims. A reader asked if he could protect non-exempt money by funding a private annuity trust. The article described private annuity trusts as a tool to defer capital gains from capital assets such as real estate. The owner creates a trust and then transfers the appreciated asset to the trust in exchange for a annuity.
Continue Reading...A reader was confused about the various affidavits that debtors may need to file in Florida such as the homestead affidavit, head of household affidavit, and affidavits of domicile. A homestead affidavit may be required to qualify for the homestead tax exemption. The homestead affidavit must be filed after you move into your residence prior to January 1 because real estate taxes are based on January 1 tax value and homestead status. That affidavit is not required for homestead asset protection.
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