Bankruptcy Reform Bid Would Cut Florida's Big Exemption For Homes
Pensacola News Journal
You can be bankrupt in Florida and still shelter a $1 million house, thanks to a century-old homestead protection provision written into the state Constitution.
Some legislators want to change that, saying the lenient law is making Florida a haven for wealthy fugitives fleeing their debts.
A resolution filed in this session of the Florida Legislature would ask voters to consider a constitutional amendment on the issue this fall.
"Florida has the nation's most liberal bankruptcy-protection laws, in terms of how many assets somebody can shield," said Rep. Buzz Ritchie, D-Pensacola.
The glare of a recent "60 Minutes" spotlight could help rally support for the measure, which was approved by the House Judiciary Committee, he said.
The proposal would limit the amount of homestead value safe from creditors to $250,000. A homestead now is exempt from seizure for unrelated, non-tax debt regardless of how valuable it is, with size the main limitation: 160 acres in the country, one-half acre in a municipality.
As a result, affluent people are moving to Florida, putting their money into expensive homes and thumbing their nose at creditors, critics say.
The "60 Minutes" segment "Bankrupt in Florida," which aired in November, cited several high-profile individuals who moved to the state and then filed for bankruptcy protection, including a former Wall Street financier Paul Bilzerian and a former banker, Marvin Warner. Bilzerian's home is in Tampa; Warner's is a horse farm near Ocala.
Lawmakers have tried before to make similar constitutional changes but the proposals never made it through the Legislature, Ritchie said.
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