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The complications of Fla. Stat. (section) 222.25(4). Does Florida's wildcard exemption allow married debtors to double dip?

I. INTRODUCTION

When debtors file for bankruptcy, their assets become property of the estate under the Bankruptcy Code. (2) Exemptions provide debtors with the legal fight to shield certain property from creditors. (3) Several policy reasons justify the existence of exemptions. (4) For example, they ensure debtors maintain a minimum standard of living once they emerge from bankruptcy so they do not need to rely on the state. (5) Exemptions also protect the debtor's family, who suffer the consequences of the debtor's misfortune. (6) Likewise, exemptions help preserve the family unit because they reduce economic stress, which is a common cause of separation and divorce. (7) While the Bankruptcy Code contains exemption provisions, it also allows states to create their own. (8)

Florida has "opted out" of the federal scheme and requires that debtors in the state claim the exemptions set out in Chapter 222. (9) The Florida Constitution adds an unlimited homestead exemption. (10) Specifically, it provides that a property owner may exempt from creditors 160 contiguous acres outside a municipality or half an acre of contiguous land within a municipality. (11) Article X, section 4(a)(2) of the Florida Constitution also provides all Floridians with a $1,000 personal property exemption. (12) The Florida legislature recently amended Florida Statutes, section 222.25 to allow natural persons who do not claim homestead or receive its benefits under the Florida Constitution an additional $4,000 personal property exemption. (13) Like other personal property exemptions, this wildcard provision helps ensure "debtors ... have necessary items for living in reasonable comfort and for earning a living." (14)

While many in the Bankruptcy community thought the new section 222.25(4), would easily integrate with Florida's existing bankruptcy exemptions, the wildcard exemption has actually generated confusion and litigation. (15) One such issue concerns a married debtor's ability to exempt his or her real property under tenancy by the entirety law and also claim the additional $4,000 wildcard. (16)

Bankruptcy courts in every Florida district have addressed how the new wildcard exemption fits into the Florida exemption scheme. (17) Part II of this paper outlines the relevant cases and explains the reasoning behind their differences. (18) While not all of the cases directly address whether a married debtor exempting real property under tenancy by the entirety can also claim the additional $4,000 wildcard exemption, the analyses they contain are germane to the issue. (19)

Generally, debtors who do not affirmatively claim the homestead exemption are entitled to the wildcard exemption if they do not receive the benefit of constitutional homestead. (20) Part III considers the threshold issues of how and when a debtor receives the benefit of homestead to decide whether married debtors exempting a residence under the law of tenancy by the entireties may also claim the $4,000 wildcard exemption. (21) Specifically, the determination of whether constitutional homestead is self-executing helps determine what steps debtors must take, if any, in order to receive a benefit without affirmatively claiming it. (22) This section also examines the two opposing arguments regarding the timeframe during which courts assess the debtor's relationship with the property for purposes of the wildcard exemption. (23) It explains that the rigid approach of not allowing debtors to modify their exemptions for section 222.25(4) purposes leads to negative consequences, and is contrary to bankruptcy policy. (24) Finally, Part IV uses the analysis from the previous section to examine the diverging opinions regarding debtors' ability to exempt their homes as tenancy by the entireties and claim the wildcard exemption. (25) This section also explores the history and policy behind tenancy by the entireties law as well as the legislative history behind Florida's wildcard exemption. (26)

The paper concludes that a married debtor who exempts real property under tenancy by the entireties law receives the benefit of Florida's constitutional homestead exemption and, therefore, may not claim the additional $4,000 personal property exemption under section 222.25(4). (27)

II. CASE LAW ADDRESSING FLA. STAT. [section] 222.25(4)

Florida Statute section 222.25(4) states, in relevant part, that "property... exempt from attachment, garnishment, or other legal process [includes ... a] debtor's interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution." (28) Since the provision's enactment in July of 2007, bankruptcy courts across Florida have had the opportunity to interpret its meaning. (29)

The Middle District first construed the provision in In re Gatto, (30) which consolidated three cases sharing common factual backgrounds, the debtors lived in residences eligible for constitutional homestead. (31) Rather than exempting their properties, the debtors timely notified creditors of their intent to surrender the property, and instead claimed the wildcard exemption, based on the contention that they were not claiming or receiving the benefits of constitutional homestead. (32)

As part of its analysis of how a debtor receives the benefit of homestead, the court first parsed out the provision's language and explained that since the word "receive" is in the present tense, the debtors' relationship with the property on the date of the petition determines their entitlement to the personal property exemption. (33) Next, the court found the prepositional phrase "of a homestead exemption under s. 4, Art. X of the State Constitution" modifies the word "benefit." (34) Thus, the homestead benefits a debtor receives must derive from article X, section 4. (35) In other words, of the various protections homestead affords, the only protection implicated in the context of the wildcard exemption is the one prohibiting creditors from attaching their liens. (36) This determination helps ensure debtors do not receive the $4,000 wildcard exemption merely because they do not affirmatively claim the constitutional homestead exemption. (37) As an example, the court recognized the possibility of abuse where a husband and wife file a joint petition but one claims the homestead while the other claims the $4,000. (38) The court stressed that in such a situation, the benefits received by the spouse who claimed the benefit extends to the non-claiming spouse. (39) Simply stated, when a debtor can shield his property from creditors, the debtor receives the benefit of homestead and may not receive the $4,000 personal property exemption under section 222.25(4) of the Florida Statutes. (40)

The court in this case concluded that since at the time of the petition the debtors clearly intended to surrender their properties to creditors, they did not receive the benefit within the meaning of section 222.25(4), and were, therefore, entitled to the provision's personal property exemption. (41)

In In re Morales, (42) the debtor claimed at the time of petition he would reaffirm the secured debt for his home and, therefore, claimed the constitutional homestead exemption. (43) He later changed his mind and decided to surrender the home to creditors and claim the wildcard exemption instead. (44) However, the debtor's intention at the time he modified his exemptions was unclear. (45) The court explained that proper abandonment is one of the ways a homeowner can "lose" homestead protection. (46) To do so, a debtor must intend to abandon and intend not to return. (47) In this case, since the debtor's intention at the time of the petition was to reaffirm, the debtor was not entitled to the $4,000 personal property exemption because by reaffirming the debt, he was receiving the benefit of constitutional homestead. (48) The court also stressed that the statute primarily focuses on giving additional protection to those without real property. (49) It added it would have considered the debtor's desire to surrender the property and instead opt for the section 222.25(4) exemption. (50) However, the debtor's intentions in this case were unclear rendering the court unable to conclude any other way. (51)

Florida's first opportunity to deal with the issue of exempting real property under tenancy by the entireties and claiming the new $4,000 wildcard exemption came with In re Franzese. (52) In that case, a married debtor individually filed a Chapter 7 petition. (53) In his schedules, he used Florida Statutes, section 222.25(4) to exempt a car worth $4,000, and tenancy by the entireties law to exempt his residence. (54) He argued he was entitled to the wildcard because he did not receive the benefits (55) of constitutional homestead. (56) Specifically, he claimed any benefit he received stemmed from "the Florida common law theory allowing husbands and wives to own property as tenants by the entireties." (57) He further maintained he did not receive the benefit of constitutional homestead since the mortgage debt on the property exceeded the value of the home. (58)

The court held married debtors receive the benefit of constitutional homestead under the wildcard exemption when they exempt their property under tenancy by the entireties law because they live in the property and intend to remain there. (59) As such, although the debtor did not claim constitutional homestead, he was protected from a forced sale. (60)

In In re Shoopman, (61) the debtor initially failed to claim constitutional homestead despite intending to reaffirm the mortgage debt. (62) He then allowed the mortgage creditors to foreclose. (63) The Court permitted the debtor to take advantage of the wildcard exemption. (64) It agreed with In re Gatto that the constitutional homestead benefit in question relates to a debtor's ability to shield the home from creditors and is distinct from benefits homeowners receive by virtue of owning real property. (65) It further explained the "receive the benefits" portion of section 222.25(4) ensures those who benefit from constitutional homestead do not also receive the wildcard exemption. (66) The Court then departed from In re Gatto (67) and In re Morales (68) by saying the debtor's intention to reaffirm or surrender is not enough to make the determination of whether the debtor receives the benefits of constitutional homestead. (69) Unfortunately, it offered no further explanation or analysis regarding the proper timing to determine whether a debtor receives a homestead benefit. (70)

In In re Hernandez, (71) the Court once again dealt with a debtor exempting property under tenancy by the entireties and claiming the wildcard. (72) As in In re Franzese, this case involved a married debtor who filed individually. (73) Here, the Court departed from the reasoning in In re Franzese and explained that mere eligibility for constitutional homestead was not enough to preclude a debtor from seeking the section 222.25(4) exemption. (74) Instead, the Court found the reasoning in In re Gatto preferable. (75) Specifically, courts should decide whether debtors receive the benefit of homestead at the time of the petition. (76) Additionally, any benefit must derive from the constitutional protection from creditors and not benefits incidental to homeownership. (77) Here, the debtor spouse received the benefit of constitutional homestead at the time of the petition and could shield his home from creditors because the non-debtor spouse retained the benefit of homestead. (78) Therefore, the Court barred the debtor from receiving the wildcard exemption. (79)

The court in In re Fyock (80) reached a very different conclusion when faced with a similar issue. (81) Like the debtors in In re Franzese (82) and In re Hernandez, (83) this case dealt with a married debtor who individually filed for Chapter 7. (84) The debtor again claimed her home exempt under tenancy by the entireties (85) and attempted to exempt personal property worth $4,000 under section 222.25(4) of the Florida Statutes. (86) Here, the Court allowed the debtor to claim the wildcard exemption since she did not use constitutional homestead to exempt her property. (87) The Court reasoned that homeowners are not automatically entitled to homestead; they "must take affirmative steps to take advantage of the Florida Constitutional homestead exemption," to prevent a forced sale. (88) Furthermore, debtors receive constitutional homestead benefits in two ways. (89) They may file a Notice of Homestead in public records before a levy. (90) In the alternative, they may notify the Sheriff attempting to levy that the property is the debtor's homestead. (91)

In In re Magelitz, (92) the debtor indicated he intended to remain in the home and make payments, but rather than exempting the residence, he claimed he was entitled to the $4,000 wildcard exemption. (93) The Court did not allow the debtor to claim the $4,000 personal property exemption under section 222.25(4). (94) It followed the reasoning in In re Gatto, (95) In re Morales, (96) and In re Franzese, (97) rather than In re Shoopman (98) and In re Hernandez, (99) and held that when a debtor-homeowner lives in the property and intends to remain, the debtor receives a constitutional homestead benefit for section 222.25(4). (100)

As the case law reflects, there is obvious disagreement among the Florida Bankruptcy Courts when it comes to the question of whether married debtors may exempt their residence under the law of tenancy by the entireties and claim the wildcard exemption. The courts not only diverge in their conclusions, but also in their analyses. However, it is clear that a resolution hinges primarily on whether a claim of tenancy by the entireties is effectively the same as a constitutional homestead claim under these circumstances.

III. RECEIVING THE BENEFIT OF CONSTITUTIONAL HOMESTEAD

The homestead examination in this context requires a two-step approach. First, the analysis considers whether the Florida homestead provision is self-executing to determine how a debtor benefits from a constitutional homestead claim. Next, it relies on case law and bankruptcy policy to determine at when a debtor receives the benefit of constitutional homestead.

A. Is HOMESTEAD SELF-EXECUTING?

A constitutional provision is self-executing if it "lays down a sufficient rule by means of which the right or purpose which it gives or is intended to accomplish may be determined, enjoyed, or protected without the aid of legislative enactment." (101) Policy favors a presumption that the constitutional provisions are self-executing because it is the best way to ensure that the legislature carries out the people's will. (102)

Nevertheless, Florida's constitutional homestead provision is not self-executing because, despite setting forth technical requirements, the language does not specify what a homeowner must do to claim the benefit. (103) Chapter 222 of the Florida Statutes explains that when a creditor attempts to foreclose on a debtor's property, the debtor may use the defense of homestead (104) by designating the property as such either before (105) or after levy. (106) The process is very simple. Prior to levy, a homeowner must describe the property and declare it as homestead through a written, signed, and recorded statement. (107) However, the debtor can use the homestead defense even after a levy because only abandonment or alienation of the property leads to a loss of homestead. (108)

Where a levy has already occurred, the debtor or the debtor's attorney may notify the levying authority in a sworn, written statement that the property is his homestead. (109) As such, In re Fyock is correct. Florida's constitutional homestead provision is not self-executing because homeowners are not automatically entitled to homestead benefits; they have to take affirmative steps to prevent a forced sale. (110)

Since constitutional homestead is not self-executing, the question remaining is how does a debtor benefit from homestead? Florida has long held that courts should liberally apply the state's constitutional homestead provision.(111) A liberal application of the constitutional homestead provision means that, so long as the "the exemption does not become an instrument of fraud[,]" (112) courts must rely solely on the constitutional language to determine the circumstances under which a homeowner must relinquish the property. (113) Judges have no discretion in the matter and may therefore order surrender only for unpaid taxes or defaulted consensual liens. (114) The liberal interpretation ensures homeowners receive maximum protection. (115)

The In re Franzese analysis states a homeowner who lives and intends to remain in the property receives the benefit of homestead. (116) The analysis in In re Magelitz, which explains mere eligibility is enough to bestow the benefit of homestead upon a homeowner, (117) appear to be in-line with Florida's long-standing principle that courts should liberally apply the state's constitutional homestead provision. While most courts do not go so far as to presume homestead, (118) courts using a liberal approach presume a homestead claim is valid when a debtor makes it. (119) Because of this liberal, debtor-friendly application of homestead, courts like the ones in In re Franzese and In re Magelitz, have found that when a homeowner resides, and intends to remain, in the property, the burden shifts to either the trustee or the creditor to show the debtor is not entitled to the constitutional homestead exemption. (120) The challenger needs a strong showing that the debtor is not entitled to the exemption. (121)

Another factor that bolsters the argument that In re Franzese and In re Magelitz have the correct approach is the fact that homestead is very difficult for homeowners to lose. (122) In fact, permanent abandonment is one of the few ways to lose the exemption. (123) Proper abandonment depends on the facts and circumstances of each case, (124) and the burden of proof rests with the creditors. (125) To succeed, challengers must provide clear evidence (126) that the debtor voluntarily relinquished possession and intended never to return. (127) The intent prong is by far the most crucial factor in the determination. (128) Additionally, creditors may not rely on evidence the debtor is absent involuntarily or has left the property to attend to health, financial, or family matters. (129)

Therefore, while homestead is not self-executing, courts do not go too far when they presume a debtor, who owns a home, resides there, and intends to remain there, benefits from constitutional homestead. (130) This conclusion is consistent with the policy reason behind Florida's constitutional homestead exemption, which aims to offer stability by allowing homeowners and their families to live "beyond the reach of financial misfortune and the demands of creditors [.]" (131)

B. WHEN DOES THE HOMEOWNER RECEIVE THE BENEFITS OF HOMESTEAD?

In In re Gatto, the court explained the debtor's intent to reaffirm or surrender the property at the date of the petition is the proper time to determine whether he receives a constitutional homestead benefit. (132) While most cases (133) appear to follow this reasoning, at least one apparently does not. (134) The court in In re Shoopman found a debtor's intent to reaffirm or surrender the property is insufficient to determine whether the debtor received a constitutional homestead benefit. (135) Neither of the opinions explains the reasoning behind their positions. (136) The argument is between the rigid approach, which prefers debtors make a final decision about exemptions at the time of the petition, and the flexible approach, which allows debtors to modify their exemptions for the purpose of the application of the Florida wildcard statute. (137)

Despite seemingly widespread support, In re Gatto's rigid approach is problematic and contrary to bankruptcy policy. Bankruptcy exemptions ensure debtors do not emerge from bankruptcy destitute. (138) Society benefits because exemptions prevent debtors from becoming a burden on taxpayers by turning to the state for assistance. (139) Once debtors file a petition, Rule 1007(c) provides them only 15 days to file for the exemptions they would like. (140) Since debtors have to make up their minds quickly, In re Shoopman's flexible approach may be more practical because many debtors do in fact need to make amendments as the case moves forward. (141) Furthermore, the flexible approach is also in line with the policy of not leaving debtors destitute. Under In re Gatto, the debtor's only chance to claim either the homestead or the $4,000 personal property exemption is within 15 days of the petition. (142) If the debtor initially opts for the homestead exemption and later changes his mind, the rigid approach effectively precludes the debtor from claiming the $4,000 wildcard exemption. (143) In fact, the debtor in that situation would only be entitled to the constitutional $1,000 personal property exemption. (144) In such a situation, a debtor who emerges from bankruptcy is likely to turn to the state for assistance.

While it is convenient and practical for creditors to ask debtors to make up their minds within a few days of the petition, not allowing debtors to amend their scheduled exemptions for purposes of deciding the applicability of Fla. Stat. [section] 222.25(4) as the process continues is contrary to the policy behind the exemptions and the discharge. (145) So long as debtors make their intentions clear, they should be allowed to amend their schedules. (146) This outcome is consistent with the preceding conclusion that, while constitutional homestead is not self-executing, courts can presume the benefit where a homeowner resides, and intends to remain, in the property. (147) Since Florida's approach to constitutional homestead is very liberal, it is inconsistent with longstanding state law to limit the debtor's ability to exempt property after the first 15 days of the petition.

IV. CAN DEBTORS EXEMPT REAL PROPERTY UNDER TENANCY BY THE ENTIRETIES AND CLAIM FLA. STAT. [section] 222.25(4) EXEMPTION?

In addition to the state law exemptions a debtor may claim under section 522(b)(2) of the Bankruptcy Code, the debtor may also claim real property held as a tenancy by the entirety as exempt pursuant to section 522(b)(3)(B). (148) If debtors exempt property under the tenancy by the entirety provision, they are not required to exempt it under Florida's constitutional homestead. (149) The question is whether a married debtor exempting the property under tenancy by the entireties receives the benefit of homestead. If yes, the debtor will be unable to take advantage of the $4,000 wildcard exemption under Florida Statutes, section 222.25(4). (150) If not, the debtor may claim the additional personal property exemption. (151)

Tenancy by the entireties has been part of Florida law for over sixty years. (152) This form of ownership is reserved exclusively for married couples and allows each spouse to own property in its entirety as if the couple were one person. (153) Tenancy by the entireties originated in England "when married women could not hold property individually." (154) Despite the fact that the 1968 Florida Constitution abolished "all distinctions between married men and women[,]" (155) the doctrine survives and continues to exempt property (156) from the hands of creditors. Creditors can only attach property for joint debt (157) and may not attach for the debts of an individual spouse. (158) Florida presumes that spouses who own property hold it as a tenancy by the entirety. (159) Such married debtors "continue to benefit from the double protection of both the homestead and the tenancy by the entirety creditor exemption." (160) While tenancy by the entireties and homestead serve similar functions, the main difference between the two is that Florida's constitutional homestead does not distinguish between joint debt and individual debt; it shields the property from all creditors for all debts. (161)

The history and reasoning behind tenancy by the entireties reveals no policy reason to create an exception to the rules and conclusions of the previous sections. This determination is in line with the legislative history of the newly enacted provision, the language of which suggests the legislature sought to protect non-homeowners. (162) The legislature repeatedly states Florida Statutes, section 222.25(4) is meant to apply to those "persons without homestead property" or "persons who do not own homestead property." (163) It also adds that "[t]he exemption for persons with homestead property will remain at $1,000 as provided in the Florida Constitution." (164) The idea of leveling the playing field between homeowners and non-homeowners is common. Several states have considered the argument, (165) and the legislative history for the federal wildcard exemption indicates Congress also enacted the provision to prevent discrimination against non-homeowners. (166)

Like all property owners who meet the technical requirements, (167) married debtors who own real property as a tenancy by the entirety may claim a constitutional homestead exemption. (168) As explained above, while homestead is not self-executing, it is nevertheless very easy to claim.

Specifically, if a debtor owns the property, resides in it, and intends to remain, the debtor benefits from constitutional homestead because he can shield the property from creditors. (169) Consequently, a married debtor exempting property under the doctrine of tenancy by the entireties receives the benefit of constitutional homestead because the mere fact of exempting the residence indicates the debtor's intention to remain. (170) As such, courts should not allow the debtor to claim the additional $4,000 wildcard exemption.

V. CONCLUSION

Despite the drafters' efforts and desire to enact a clear provision that fits neatly into Chapter 222, the new wildcard exemption has caused much confusion and litigation. One issue that has arisen relates to married debtors who exempt their real property under tenancy by the entireties and then claim the $4,000 personal property exemption.

To resolve the matter, we first need to determine how and when a debtor receives the benefit of constitutional homestead. While constitutional homestead is not self-executing, Florida law is clear that courts must construe the provision very liberally. A liberal application means that when a debtor owns the property, lives there, and intends to remain, courts presume the debtor's homestead claim valid. Additionally, limiting the debtor's ability to choose among the homestead exemption or the wildcard exemption too shortly after the petition is inconsistent with longstanding Florida law. In fact, such a limitation creates the risk that debtors will emerge from bankruptcy destitute and is contrary to bankruptcy policy, which favors giving debtors the necessities so that they do not become a burden on the state.

Finally, taking into consideration the policy reasons behind the wildcard exemption and the legislative history of tenancy by the entireties law, there is no policy reason to create an exception to the above determinations. Debtors who exempt their homes under tenancy by the entireties effectively reveal their intent to remain in the property after the bankruptcy. Therefore, these debtors benefit from constitutional homestead, and courts should not allow them to double exemptions.

RUBINA K. SHALDJIAN (1)

(1.) Bankruptcy Associate, Florida Default Law Group, P.L.; J.D., Florida State University College of Law (2008). Special thanks to Professor Adam J. Hirsch for his guidance and to my family for their continued support.

(2.) See 11 U.S.C. [section] 541 (2006); In re McClain, 281 B.R. 769, 772 (Bankr. M.D. Fla. 2002).

(3.) See 11 U.S.C. [section] 522; William T. Vukowich, Debtors" Exemption Rights, 62 GEO. L.J. 779, 779 (1975). Vnkowich suggests that only exemptions that further exemption policy should be allowed. See id. at 781.

(4.) See Vukowich, supra note 3, at 781.

(5.) See id. at 786.

(6.) See id. at 784.

(7.) See id. at 785.

(8.) See 11 U.S.C. [section] 522(b)(2); Laura B. Bartell, The Peripatetic Debtor." Choice of Law and Choice of Exemptions, 22 EMORY BANKR. DEV. J. 401,406 (2006).

(9.) See Jacob E. Mitrani, A Year Older, A Year Wiser." The Evolution of BAPCPA and Florida's Homestead Exemption, 26 AM. BANKR. INST. J. 10, 10 (Mar. 2007); In re McClain, 281 B.R. 769, 772 (Bankr. M.D. Fla. 2002).

(10.) See FLA. CONST. art. X, [section] 4(a)(1); David A. Samole & David L. Rosendorf, Homestead Exemption No Longer "'Debtors' Paradise," 24 AM. BANKR. INST. J. 6, 6 (Dec./Jan. 2006). Almost every state offers a homestead exemption. See Stephen G. Gilles, The Judgment-Proof Society, 63. WASH. & LEE L. REV. 603, 630-31 (2006). "As of 1996, seven states did not limit the homestead exemption dollar amount; nine states exempted more than $100,000, eight states exempted between $50,000 and $100,000; four states exempted between $30,000 and $50,000; eighteen states exempted less than $30,000... and five states had no homestead exemption." Id.

(11.) FLA. CONST. art. X, [section] 4(a)(1).

(12.) Id. art. X, [section] 4(a)(2).

(13.) FLA. STAT. [section] 222.25(4) (2008). Exemptions, such as the Florida wildcard, which provide an aggregate dollar amount, allow debtors to decide for themselves which items they need rather than imposing specific property exemptions that may effectively protect unnecessary items. See Vukowich, supra note 3, at 829.

(14.) See Vukowich, supra note 3, at 826 (explaining the reasons that justify the exemption of personal and other such property).

(15.) See, e.g., In re Heckman, 395 B.R. 737 (Bankr. N.D. Fla. 2008) (addressing whether section 225.25(4) of the Florida Statutes allows debtors who own a mobile home legally located on a leased lot to claim the $4,000 exemption); In re Bezares, 377 B.R. 413 (Bankr. M.D. Fla. 2008), aff'd on reh'g, 383 B.R. 796 (Bankr. M.D. Fla. 2007) (deciding whether debtors claiming the $4,000 wildcard exemption may also claim the $1,000 personal property exemption under the Florida Constitution for a total of $5,000); In re Hafner, 383 B.R. 350 (Bankr. N.D. Fla. 2008) (considering whether the new provision prohibits stacking the $4,000 wildcard exemption with the $1,000 car exemption).

(16.) See In re Franzese, 383 B.R. 197 (Bankr. M.D. Fla. 2008).

(17.) See, e.g., In re Guillermo, 381 B.R. 917 (Bankr. S.D. Fla. 2008); In re Gatto, 380 B.R. 88 (Bankr. M.D. Fla. 2007); In re Hafner, 383 B.R. 350.

(18.) See supra Part II.

(19.) See, e.g., In re Fyock, 391 B.R. 882 (Bankr. M.D. Fla. 2008); In re Rogers, 396 B.R. 100 (Bankr. M.D. Fla. 2008).

(20.) See FLA. STAT. [section] 222.25(4) (2008); In re Franzese, 383 B.R. 197.

(21.) See infra Part III ("Receiving the Benefit of Constitutional Homestead").

(22.) See infra Part III ("Receiving the Benefit of Constitutional Homestead").

(23.) See infra Part III ("Receiving the Benefit of Constitutional Homestead").

(24.) See infra Part III ("Receiving the Benefit of Constitutional Homestead").

(25.) See infra Part IV ("Can Debtors Exempt Real Property under Tenancy by the Entireties and Claim Fla. Stat. [section] 222.25(4) Exemption?").

(26.) See infra Part IV ("Can Debtors Exempt Real Property under Tenancy by the Entireties and Claim Fla. Stat. [section] 222.25(4) Exemption?").

(27.) See infra Part IV ("Can Debtors Exempt Real Property under Tenancy by the Entireties and Claim Fla. Star. [section] 222.25(4) Exemption?").

(28.) FLA. STAY. [section] 222.25(4) (2009).

(29.) See, e.g., Osborne v. Smith, 398 B.R. 355 (S.D. Fla. 2008); In re Brown, 406 B.R. 568 (Bankr. M.D. Fla. 2009); In re Morales, 381 B.R. 917 (Bankr. S.D. Fla. 2008); In re Oliver, 395 B.R. 792 (Bankr. S.D. Fla. 2008); In re Heckman, 395 B.R. 737 (Bankr. N.D. Fla. 2008); In re Magelitz, 386 B.R. 879 (Bankr. N.D. Fla. 2008); In re Bezares, 377 B.R. 413 (Bankr. M.D. Fla. 2007).

(30.) 380 B.R. 88 (Bankr. M.D. Fla. 2007).

(31.) See id. at 90.

(32.) See id. 90-91.

(33.) See id. at 91.

(34.) See id.

(35.) See id. at 92.

(36.) See In re Gatto, 380 B.R. 88, 93 (Bankr. M.D. Fla. 2007). The court explains the constitutional homestead benefit that shields the home from creditors is different from other homestead benefits that are incidental to home ownership, such as the homestead tax exemption and the save our homes cap. See id.

(37.) See id. at 92.

(38.) See id.

(39.) See id.

(40.) See id. The court did mention that married debtors surrendering their property could each claim the $4,000 personal property exemption under section 222.25(4) of the Florida Statutes. See id. at 95 (discussing In re Rasmussen, 349 B.R. 747 (Bankr. M.D. Fla. 2006)). It added the couple would, thus, jointly be entitled to $10,000 in personal property exemptions because each would also be entitled to claim the $1,000 constitutional personal property exemption. See id.

(41.) See id. at 93.

(42.) 381 B.R. 917 (Bankr. S.D. Fla. 2008).

(43.) See id. at 919 (stating "[t]he Debtor's original statement of intention shows that the mortgages on the real property are to be reaffirmed").

(44.) See id. The debtor amended his statement to surrender the property of two of his three mortgages. See id.

(45.) See id. This lack of clarity is shown by the debtor only surrendering the property to the larger of the mortgage holder while reaffirming the smaller of the two mortgages. See id. The Court goes on to explain this "incompatibility" demonstrates the Debtors failure to clearly signal his intentions. Id. at 920.

(46.) ld. (citing In re Beebe, 224 B.R. 817, 820 (Bankr. N.D. Fla. 1998)). The Court explained that: "[a]bandonment of the homestead is one way that the protection of the homestead exemption may be lost." Id.

(47.) See In re Beebe, 224 B.R. at 820.

(48.) See id. at 921.

(49.) See In re Morales, 381 B.R. 917, 921 (Bankr. S.D. Fla. 2008).

(50.) See id.

(51.) See id. at 920.

(52.) 383 B.R. 197 (Bankr. M.D. Fla. 2008).

(53.) See id at 201.

(54.) See id. at 200-01.

(55.) The court used a dictionary and a Black's Law Dictionary to define "benefit." Id. at 205. It concluded a benefit is "the right, privilege, or interest in some advantage to which a debtor is entitled to receive, regardless of whether the debtor actually has realized the advantage." Id. at 205-06.

(56.) See id. at 201.

(57.) Id.

(58.) See In re Franzese, 383 B.R. at 201.

(59.) See id. at 204-05. To determine homestead status, the court considers ownership, residence, and intent to reside. See id. at 205. These are known as the objective and subjective factors. See id. at 204.

(60.) See id. at 206.

(61.) See In re Shoopman, No. 07-19450-BKC-PGH, 2008 WL 817109, at *1 (Bankr. S.D. Fla. Mar. 25, 2008).

(62.) See id.

(63.) See id.

(64.) See id. at *4.

(65.) See id. at *2.

(66.) See id. at *3.

(67.) 380 B.R. 88 (Bankr. M.D. Fla. 2007).

(68.) 381 B.R. 917 (Bankr. S.D. Fla. 2008).

(69.) See In re Shoopman, 2008 WL 817109, at *3.

(70.) See id.

(71.) No. 07-16379-BKC-RAM, 2008 WL 1711528 (Bankr. S.D. Fla. Apr. 10, 2008).

(72.) See id. at *1.

(73.) See id.

(74.) See id. at *3.

(75.) See id. at *4.

(76.) See id.

(77.) In re Hernandez, 2008 WL 1711528, at *4-5.

(78.) See id. at *5.

(79.) See id.

(80.) 391 B.R. 882 (Bankr. M.D. Fla. 2008).

(81.) See id.

(82.) 383 B.R. 197, 204-05 (Bankr. M.D. Fla. 2008).

(83.) No. 07-16379-BKC-RAM, 2008 WL 1711528, at *1 (Bankr. S.D. Fla. Aug. 10, 2008).

(84.) See In re Fyock, 391 B.R. at 883.

(85.) See id.; 11 U.S.C. [section] 522(b)(3)(B) (2007).

(86.) See In re Fyock, 391 B.R. at 885.

(87.) See id.

(88.) Id. at 886.

(89.) Id. at 885-86.

(90.) See FLA. STAT. [section] 222.01 (2005); In re Fyock, 391 B.R. at 885.

(91.) See [section] 222.02; In re Fyock, 391 B.R. at 885-86.

(92.) See In re Magelitz, 386 B.R. 879 (Bankr. N.D. Fla. 2008).

(93.) See id. at 881.

(94.) See id. at 883-84; see also In re Rogers, 396 B.R. 100, 103 (Bankr. M.D. Fla. 2008) (holding when a debtor does not exempt homestead but reaffirms the debt, the debtor may not claim the $4,000 personal property exemption under section 222.25(4) of the Florida Statutes because the debtor receives the benefit of homestead by virtue of the fact the property remains shielded from creditors even after the discharge).

(95.) 380 B.R. 88 (Bankr. M.D. Fla. 2007).

(96.) 381 B.R. 917 (Bankr. S.D. Fla. 2008).

(97.) 383 B.R. 197 (Bankr. M.D. Fla. 2008).

(98.) No. 07-19450-BKC-PGH, 2008 WL 817109 (Bankr. S.D. Fla. Mar. 25, 2008).

(99.) No. 07-16379-BKC-RAM, 2008 WL 1711528 (Bankr. S.D. Fla. Apr. 10, 2008).

(100.) See In re Magelitz, 386 B.R. 879, 883 (Bankr. N.D. Fla. 2008).

(101.) Gray v. Bryant, 125 So. 2d 846, 851 (Fla. 1960).

(102.) See id.

(103.) See FLA. CONST. art. X, [section] 4(a).

(104.) See Callava v. Feinberg, 864 So. 2d429, 432 (Fla. 3d Dist. Ct. App. 2003).

(105.) See FLA. STAT. [section] 222.01 (2009).

(106.) See id. [section] 222.02.

(107.) See id. [section] 222.01(1).

(108.) See Fidelity & Cas. Co. of N.Y. v. Magwood, 145 So. 67, 68 (Fla. 1932).

(109.) See [section] 222.02.

(110.) See In re Fyock, 391 B.R. 882, 886 (Bankr. M.D. Fla. 2008).

(111.) See, e.g., Havoco of Am., Ltd. v. Hill, 790 So. 2d 1018, 1020 (Fla. 2001); Tramel v. Stewart, 697 So. 2d 821,824 (Fla. 1997); Butterworth v. Caggiano, 605 So. 2d 56, 58 (Fla. 1992); Quigley v. Kennedy & Ely Ins. Co., 207 So. 2d 431,432 (Fla. 1968); Olesky v. Nicholas, 82 So. 2d 510, 512 (Fla. 1955); In re Estate of Deem v. Shinn, 297 So. 2d 611,613 (Fla. 4th Dist. Ct. App. 1974); see also Grant v. Credithrift of Am., Inc., 402 So. 2d 486, 489 (Fla. 1st Dist. Ct. App. 1981) (explaining the constitution favors homestead).

(112.) Hill, 790 So. 2d at 1020; In re Harrison, 236 B.R. 784, 786 (Bankr. M.D. Fla. 1999).

(113.) See Tramel, 697 So. 2d at 824.

(114.) See, e.g., id. (holding a constitutional amendment is required to give courts the power to force forfeiture of homestead even where the owners used the home to further their criminal endeavors).

(115.) See id.; In re Edwards, 356 B.R. 807, 810 (Bankr. M.D. Fla. 2006); In re Alexander, 346 B.R. 546, 549 (Bankr. M.D. Fla. 2006); In re Harrison, 236 B.R. at 786.

(116.) See In re Franzese, 383 B.R. 197,204-05 (Bankr. M.D. Fla. 2008).

(117.) See In re Magelitz, 386 B.R. 879, 883 (Bankr. N.D. Fla. 2008).

(118.) But see In re Colwell v. Royal Int'l Trading Corp., 196 F.3d 1225, 1226 (11th Cir. 1999) (citing Snyder v. Davis, 699 So. 2d 999, 1002 (Fla. 1997)) (explaining property is presumed to be exempted under homestead).

(119.) See In re Dwyer, 305 B.R. 582, 585 (Bankr. M.D. Fla. 2004); In re Aloisi, 261 B.R. 504, 511-12 (Bankr. M.D. Fla. 2001); In re Klaiber, 265 B.R. 290, 292 (Bankr. M.D. Fla. 2001); In re Pet-tit, 231 B.R. 101,102 (Bankr. M.D. Fla. 1999); In re Harrison, 236 B.R. at 786.

(120.) See, e.g., Wechsler v. Carrington, 214 F. Supp. 2d 1348, 1351 (S.D. Fla. 2002); In re Alexander, 346 B.R. at 549; In re Edwards, 356 B.R. at 810; In re Laing, 329 B.R. 761, 770 (Bankr. M.D. Fla. 2005); In re Ballato, 318 B.R. 205,209 (Bankr. M.D. Fla. 2004); In re Dwyer, 305 B.R. at 585; In re Aloisi, 261 B.R. at 512; In re Klaiber, 265 B.R. at 292-93; In re Pettit, 231 B.R. at 102.

(121.) See, e.g., In re Alexander, 346 B.R. at 549; In re Edwards, 356 B.R. at 810; In re Laing, 329 B.R. at 770; In re Ballato, 318 B.R. at 209; In re Dwyer, 305 B.R. at 585; In re Harrison, 236 B.R. at 786.

(122.) See, e.g., In re Franzese, 383 B.R. 197, 203 (Bankr. M.D. Fla. 2008); In re Magelitz, 386 B.R. at 881.

(123.) See In re Klaiber, 265 B.R. at 293; In re Harrison, 236 B.R. 788, 790 (Bankr. M.D. Fla. 1999) [hereinafter Harrison II]; Hillsborough Inv. Co. v. Wilcox, 13 So. 2d 448,450 (Fla. 1943); Lanier v. Lanier, 116 So. 867, 868 (Fla. 1928); Nelson v. Hainlin, 104 So. 589, 589-90 (Fla. 1925). Alienation is the other way in which a homeowner can lose the homestead exemption. See Wilcox, 13 So. 2d at 450.

(124.) See Gulf Ref. Co. v. Ankeny, 135 So. 521,523 (Fla. 1931); In re Klaiber, 265 B.R. at 293; Nelson, 104 So. 2d at 590.

(125.) See In re Herr, 197B.R. 939, 941 (Bankr. S.D. Fla. 1996).

(126.) In re Klaiber, 265 B.R. at 293.

(127.) See In re Ballato, 318 B.R. 205,210 (Bankr. M.D. Fla. 2004).

(128.) See In re Klaiber, 265 B.R. at 293; see also Harrison II, 236 B.R. at 790 (explaining a creditor must have strong evidence showing the debtor does not intend to return to the property); In re Herr, 197 B.R. at 941 (stating that in Florida, the only way to show abandonment is to prove the debtor does not intend to return to the property).

(129.) See In re Ballato, 318 B.R. at 210; Harrison II, 236 B.R. at 790.

(130.) See In re Fyock, 391 B.R. 882, 886 (Bankr. M.D. Fla. 2008); In re Franzese, 383 B.R. 197, 204-05 (Bankr. M.D. Fla. 2008).

(131.) Callava, 864 So. 2d at 432 (citing Public Health Trust of Dade County v. Lopez, 531 So. 2d 946, 948 (Fla. 1988)); Bigelow v. Dunphe, 197 So. 328, 330 (Fla. 1940).

(132.) See In re Gatto, 380B.R. 88, 91 (Bankr. M.D. Fla. 2007).

(133.) See supra Part II ("Case Law Addressing Fla. Stat. [section] 222.25(4)").

(134.) See In re Morales, 381 B.R. 917, 921 (Bankr. S.D. Fla. 2008). The court in In re Morales also states later amendments might be acceptable. See id. However, it mentioned this in passing and this was not the fact situation presented. See id.

(135.) See In re Shoopman, No. 07-19450-BKC-PGH, 2008 WL 817109, at *3 (Bankr. S.D. Fla. Mar. 25, 2008).

(136.) See id.

(137.) See id.

(138.) See In re Gatto, 380 B.R. 88, 94 (Bankr. M.D. Fla. 2007).

(139.) See id. at 92.

(140.) FED. R. BANKR. P. 1007(c). "In a voluntary case, the schedules, statements, and other documents required by subdivision (b)(1), (4), (5), and (6) shall be filed with the petition or within 15 days thereafter...." Id. Section (b)(1) requires a debtor complete the schedules to be attached to the petition. See id. This is where the debtor has the opportunity to list all assets, liabilities, current income, current expenditures, etc. See id. at (b)(1).

(141.) See supra Part II (as exemplified by 4 out of the 8 cases).

(142.) See In re Gatto, 380 B.R. at 93.

(143.) See id at 92.

(144.) See FLA. CONST. art. X, [section] 4(a)(2). Article X of the Florida Constitution allows all debtors to claim a $1,000 personal property exemption. Id. This $1,000 exemption first appeared over 120 years ago in the 1885 constitution and it is unclear exactly how much this exemption would be worth today considering inflation. See FLA. CONST. art. X, [section] 4 (1885).

(145.) See Harrison H, 236 B.R. 788, 790 (Bankr. M.D. Fla. 1999).

(146.) See id. at 790.

(147.) See In re Franzese, 383 B.R. 197, 203 (Bankr. M.D. Fla. 2008).

(148.) See id. at 208.

(149.) See In re Shoopman, No. 07-19450-BKC-PGH, 2008 WL 817109, at *1 (Bankr. S.D. Fla. Mar. 25, 2008).

(150.) See id. at 2.

(151.) See id.

(152.) See Barry A. Nelson, How Does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Affect Florida Homestead? Many Unanswered Questions, 79 FLA. B. J. 22, 24 (2005); see also WILLIAM J. ROMANOS III, CREDITORS' AND DEBTORS' PRACTICE IN FLORIDA [section] 1.5 (Fla. Bar 2007) (1994) (citing a 1951 case recognizing tenancy by the entireties in Florida); Beal Bank, SSB v. Almand & Assoc., 780 So. 2d 45, 52-55 (Fla. 2001) (offering an in depth look at the history and purpose of tenancy by the entireties, beginning with the English common law).

(153.) RACHEL CREWS, CREDITORS' AND DEBTORS' PRACTICE 1N FLORIDA [section] 6.51 (Fla. Bar 2007) (1994).

(154.) Beal Bank, 780 So. 2d at 52.

(155.) Id.

(156.) Id. at 52-53. Six unities must exist to entitle spouses to tenancy by the entireties ownership: "(1) unity of possession ... ; (2) unity of interest ... ; (3) unity of title ... ; (4) unity of time ... ; (5) survivorship ... ; and (6) unity of marriage .... " Id. at 52. The tenancy by the entireties form of ownership may apply to both real and personal property. Id.

(157.) See Nelson, supra note 152, at 25.

(158.) See CREWS, supra note 153; ROBERTA A. COLTON & AMY L. DRUSHAL, CREDITORS' AND DEBTORS' PRACTICE IN FLORIDA [section] 4.5 (Fla. Bar 2007) (1994).

(159.) See COLTON & DRUSHAL, supra note 158; CREWS, supra note 153. This presumption may only be rebutted if there is clear evidence the couple did not intend to own property in this form. See COLTON & DRUSHAL, supra note 158; CREWS, supra note 153; see also Beal Bank, 780 So. 2d at 54 (explaining the express language constitutes clear evidence to rebut the presumption).

(160.) Nelson, supra note 152, at 25.

(161.) See id. (stating tenancy by the entireties provides an exemption for joint debt); see also FLA. CONST. art. X, [section] 4(a)(1) (lacking any difference between joint and individual debt).

(162.) See Fla. Staff An., S.B. 2118.4/19/2007.

(163.) Id.

(164.) Id.

(165.) See also In re Locarno, 23 B.R. 622, 624 (Bankr. D. Md. 1982); In re Rhodes, 14 B.R. 629, 634 (Bankr. M.D. Tenn. 1981), rev'd, 705 F.2d 159 (6th Cir. 1983); In re Gould, 389 B.R. 105, 114 (Bankr. N.D. Cal. 2008); In re Ambrose, 179 B.R. 982, 985 (Bankr. S.D. Ga. 1995); In re Smothers, 3 B.R. 643,644 (Bankr. N.D. Ohio 1980).

(166.) See H.R. REP. NO. 95-595, at 6317 (1977).

(167.) FLA. CONST. art. X, [section] 4(a)(1).

(168.) See Donna Litman Seiden, There's No Place Like Home(stead) in Florida--Should it Stay That Way?, 18 NOVA L. REV. 801,805 (1994).

(169.) See In re Fyock, 391 B.R. 882, 886 (Bankr. M.D. Fla. 2008); In re Franzese, 383 B.R. 197,204 (Bankr. M.D. Fla. 2008).

(170.) See In re Franzese, 383 B.R. at 204-06.
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