In a recent MA decision by Judge Melvin Hoffman of the US Bankruptcy Court, it was found that more than just a statement of intent is necessary to prove that a debtor is entitled to claim a valid homestead under 11 USC 522(d) of the bankruptcy code.
In the case of In re Ever A. Feliciano, the court found that the debtors had resided in a home in Puerto Rico for approximately 15 years, before moving to the Commonwealth of Massachusetts in 1995. Since that time, no one had occupied the house in Puerto Rico, the home had become run down and inhabitable, and had even been listed for sale for a number of years.
While the debtors acknowledged that neither they nor any dependents of theirs had occupied the home for more than a decade, they claimed an intention to return to the home at some future date, and therefore claimed that it qualified for the homestead exemption under 11 USC 522(d)(1.) The judge found that the fact that the debtors had been away from the home for 17 years, coupled with the fact that they had taken affirmative steps to try to sell the home, with no use of it by them, nor any plan to deal with the inhabitable conditions, all caused the court to determine that 522(d)(1) was inapplicable for these debtors.
The judge did throw them a bone however, allowing them to use their “pour-over” general exemption under 522(d)(5,) so that rather than a $500,000 exemption, they could shelter up to a maximum of $11,975, which could then be doubled as joint debtors. A small victory in a major battle.
Michael B. Katz, Esq.
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