Court Liberalizes Homestead Exemption For Foreign Debtors Living In ...

Florida's  homestead exemption seems simple, but in some respects the exemption involves complicated legal issues. One such issue is the relationship between the Florida homestead protection and a debtor’s status under U.S. immigration laws. There are many bankruptcy cases were a debtor’s immigration status disqualified him from a bankruptcy homestead exemption because the debtor had not yet achieved the legal right under our immigration laws to reside permanently in the U.S. and Florida.

The homestead exemption requires that the debtor intend permanently to reside in his Florida residence. Bankruptcy courts concluded that a Florida debtor could not intend permanently to reside in a Florida home if the debtor had any less than a “green card” entitling him to permanent U.S. residency.

A Florida appellate court has liberalized homestead exemptions for temporary U.S. residents. The court said that a foreign citizen’s eligibility for Florida homestead depends on his intent rather than the U.S. Immigration Service’s rules. A debtor’s eligibility for homestead is based on the all the facts relevant to his intent to reside permanently  in his house even if the debtor has not yet received a “green card.” The court upheld the homestead exemption of a foreign debtor who resided in a Florida property since its purchase, had a visa giving him the right to reside in Florida, and was actively pursuing permanent resident status.

Bankruptcy court’s application of the homestead exemption is based on non-bankruptcy Florida law. This Florida court’s interpretation of the homestead should affect foreign debtors’ homestead exemptions in Florida bankruptcy courts. Grisolia v. Pfefer, 2011 WL 5864806.