Exemption of Homestead Foreclosure Proceeds
I discussed the following case with a creditor attorney. A debtor loses his house at a foreclosure sale. The foreclosure sale price brings in enough money to pay off the mortgage and provide excess funds of $20,000. The funds are held temporarily in the trust account of the debtor’s attorney. Next, the debtor files bankruptcy. The question is whether the excess funds from the sale of a Florida homestead are exempt.
Florida law protects the proceeds from the sale of a homestead so long as the debtor intends to reinvest the proceeds in a new homestead. No case has distinguished proceeds from a voluntary sale from foreclosure sale proceeds. Therefore, the foreclosure proceeds should be exempt if intended for a new homestead.
About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.
Sign up for the latest information.
Get regular updates from our blog, where we discuss asset protection techniques and answer common questions.
Looking for help?
Schedule a phone or Zoom consultation to review your specific situation. We help clients throughout the state of Florida.