Greenspoon Marder Attorneys Set Precedent in Homestead Bankruptcy Case

News Apr 24, 2014

West Palm Beach, Fla. – April 24, 2014- Shareholder, Michael Bakst and Associate, Rilyn Carnahan of the Bankruptcy practice group with Greenspoon Marder’s West Palm Beach office recently obtained Order Sustaining Trustee’s Objection to debtors Claim of Exemption. The order was entered in the Southern District of Florida on March 11, 2014 and marks a victory as it sets the precedent for similar cases to be tried in United States Bankruptcy Court.

Carnahan, represented Bakst, the Trustee in bankruptcy, on an objection to exemption involving a $450,000.00 free and clear property. The Debtor was writing off with the (IRS) Internal Revenue Service 25% of her home as a business expense and trying to claim the entire property as exempt as homestead in her bankruptcy. Carnahan was responsible for briefing and executing all documents relating to the case and filing the objection for the matter.

Because Florida’s homestead exemption is limited to the residence of the owner or the owner’s family, “homestead is established by actual occupancy of the subject property accompanied by the intent to reside in the property as one’s homestead.” However, even though Florida’s homestead provisions are to be interpreted liberally, “courts have repeatedly held that the homestead exemption cannot exempt property used for business purposes.”

In this case, the Debtor, Renee M. Shaker, claimed homestead exemption of her real property, stating that since 25% of her home was being used for her business, Sine Audio, a company that rents audio and video equipment for small corporate events, it should not be subject to the bankruptcy estate.

The court ruled in favor of the Trustee, finding that the portion of the property which was being used for the business would not be exempt and could be administered to pay her creditors in the Debtor’s bankruptcy. They found that seventy-five percent (75%) of the Debtor’s Property is exempt homestead property, while twenty-five percent (25%) of the Debtor’s Property is non-exempt property which belongs to the Debtor’s bankruptcy estate. This meant that the Court would not allow her to also claim the business portion of her property as exempt property just because the Debtor found herself in bankruptcy court.

“We are pleased at the favorable outcome in this case and Ms. Carnahan did an excellent job in this case for which there is no other precedent in Florida involving this issue,” said Shareholder of Greenspoon Marder, Michael Bakst.

Mr. Bakst is experienced in the areas of bankruptcy and insolvency, including representing creditors, debtors, bankruptcy trustees, receivers, and debtors, as well as representing litigants with complex bankruptcy matters, commercial litigation, receiverships, and assignments for the benefit of creditors. He is a panel United States Bankruptcy Trustee for the Southern District of Florida and has also served as an Examiner appointed through the offices of the United States Trustee.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 225 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has maintained a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

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This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

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Greenspoon Marder Attorneys Set Precedent in Homestead Bankruptcy Case

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