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Homestead Exemption in Chapter 7 Bankruptcy

Homestead Exemption in Chapter 7 Bankruptcy

A debtor sought to claim a homestead exemption for property formerly owned by his father which passed to him upon his father’s death in the matter of In re Stoner. The bankruptcy Trustee objected to the exemption, filed under 11 U.S.C. Section 522(d)(1), claiming that, as the executor of his father’s estate, the debtor held an interest in the property on the date of the bankruptcy filing. The Court found that qualification of a residence includes permanence. Although the debtor’s father passed away prior to the filing of the bankruptcy petition, the debtor used a different address when filing and, in a later amendment to the petition 2 years after the original filing, chose to amend his address to the property for which the exemption is now being claimed. Prior to amending the petition to reflect his address as being that of the property claimed for exemption, the debtor sold the property and divided the proceeds. Further, the Court held that 11 U.S.C. Section 522(d)(1) was intended specifically for the protection of home-mortgage lenders. The Bankruptcy Court, in the case of in re Stoner, held that the mere possession of a future interest as a beneficiary to a will does not qualify a debtor to claim a property under the homestead exemption. If you are considering filing for bankruptcy you will be addressing many issues such as exemptions and whether you qualify for same. You should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding bankruptcy, exemptions, foreclosure and other consumer debt matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for information purposes only and in no way is intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief.

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