Things are getting even tougher for the consumer. You used to be able to get some relief through bankruptcy, but the noose is tightening. The case is In re: James Matthew Franzese, Case No. 07-3944-KSJ.

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http://www.bankruptcyorlando.com/2008/02/florida-court-c.html

An Orlando bankruptcy court issued a decision which curtails the personal property exemptions for debtors who own their own residence. The case is In re: James Matthew Franzese, Case No. 07-3944-KSJ.

In July, 2007, the Florida legislature created a $4,000 wildcard personal property exemption for people who do not receive benefits of a homestead exemption. Until now, debtors who owned a homestead which had no equity, or debtors who claimed their homestead exempt as tenants by entireties property, had been claiming the $4,000 wildcard exemption because they had relied upon the Constitutional homestead exemption on their bankruptcy petition. (Other courts have held that the new $4,000 wildcard personal property exemption is separate and above the basic $1,000 personal property exemption in the Florida Constitution.) This latest bankruptcy court decision ends this bankruptcy planning technique.

According to the Franzese decision a debtor who is eligible to claim homestead exemption in bankruptcy cannot avail themselves of the $4,000 personal property exemption whether or not they affirmatively seek the homestead exemption in bankruptcy. Any debtor who on the date of filing is entitled to a homestead exemption cannot claim the $4,000 additional personal property exemption regardless of whether the homestead has any equity to protect and the debtor intends to remain in the home. Debtors must state in a timely manner their intent to surrender their homes when they file bankruptcy if they want to claim the $4,000 wildcard exemption.

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