$125,000 Cap of 522(p) is Stackable in Joint Case

The Court in In re Limperis, 2007 WL 1586502 (Bkrtcy.S.D.Fla.)(Olson J.) held that each debtor in a joint case is entitled to claim $125,000 ($136,875 since April 1, 2007) of equity as exempt per the 522(p) cap. In this case the debtors acquired their homestead within 1215 days prior to the filing of the bankruptcy and were therefore subject to the exemption cap of section 522(p) which restricts the homestead exemption to $125,000. The Court adopted the reasoning set forth in In re Ramussen, 349 B.R. 747 (Bankr.M.D. Fla.2006) and held that each debtor in a joint case may claim a $125,000 interest in the homestead as exempt. The Court in Ramussen reasoned that stacking is not inconsistent with current practice under Florida law and the Bankruptcy Code governing other exemptions and that each debtor gets to claim exemptions separately.

Important Homestead Decision Under 2005 Bankruptcy Act

In the recent decision of In re: Kaplan, 2005 WL 2508151 (Bankr. SD Fla.), Judge Robert A. Mark of the Bankruptcy Court of the Southern District of Florida upheld the application of one of the homestead limitations imposed by section 522(p) the 2005 Bankruptcy Act (BAPCPA). The Court upheld the validity of the provision that limits the Florida homestead exemption to $125,000 if the property was acquired within 1215 days of the filing for bankruptcy. In doing so, the Court refused to follow the reasoning of a recent Arizona Bankruptcy Court decision which held that such provision does not apply in “opt out” states such as Florida.

Jordan E. Bublick, Attorney at Law, Practice Limited to Bankruptcy Law, Board Certified Specialist in Consumer Bankruptcy Law (American Board of Certification), Member of the Florida Bar since 1983