The Florida Supreme Court has substantially expanded the amount of personal property Florida bankruptcy debtors can exempt in a Chapter 7 bankruptcy. At issue is the so-called “wildcard” exemption under Florida Statute 222.25 (4) which permits a $4,000 additional property exemption to debtors who do not receive the benefit of the Constitutional homestead exemption. I have not read the entire opinion (25 pages), but this is an initial summary.
Up to now, bankruptcy courts have narrowly construed this exemption. The courts have held that even debtor who do not claim their homestead as exempt on their bankruptcy schedules are ineligible for the $4,000 wildcard if they receive, or could receive, any legal benefit of a homestead exemption. Thus, for instance, a debtor with an upside down homestead with no equity to exempt still has been ineligible for the $4,000 wildcard exemption if that debtor had or could have had other legal benefits of homestead ownership. Another example of a narrow interpretation is a case where a man filed bankruptcy individually, and the man and his non-filing wife jointly owned a homestead. The man claimed the house exempt as a tenants by entireties asset but did not assert homestead exemption. A bankruptcy court held that because the debtor’s non-filing wife retained homestead rights the debtor could receive homestead benefits.
The Florida Supreme Court rejected bankruptcy judges strict and narrow reading of the wildcard exemption. The C