For Florida residents, losing a home doesn’t necessarily need to become a reality due to a personal bankruptcy. In a recent online financial advice article, the author recounts the personal story of how his parents, immigrants from Asia, lost their family home as the result of a failed business. According to the author, a combination of a lack of knowledge about American law and his mother and father’s failure to communicate were why his parents offered the family home as collateral to secure a business loan for a failing business. Because of that decision, when the family eventually filed a Chapter 7 liquidation bankruptcy, the home was lost.
It was advised that the loss of the family home could have been avoided. Bankruptcy law, as opposed to the family’s native country, allows not only the forgiveness of debts, but possible protection of home ownership through the legal provision entitled the ‘homestead exemption.” The exemption is designed to provide limited protection from certain creditor claims and other potential issues such as tax claims. The provision applies in almost every state. In the state of Florida, almost unlimited protection applies.
In the author’s opinion, if his parents had been more forthcoming about the condition of their business, the loss of their home could have been avoided. He views bankruptcy as a way to begin life anew.
A consultation with an experienced bankruptcy attorney may be comforting for Florida residents who are possibly thinking that they may lose their home due to financial issues. An attorney may be able to explain how the homestead exemption applies to their situation. In addition, with the goal of helping a person or family regain a fresh financial start, an attorney may be able to formulate a reasonable plan to help restore financial order.
Source: Forbes, “How To Bounce Back From Bankruptcy & The Loss Of Your Home“, Cameron Keng, August 05, 2013