Florida Homestead Conversion Case Law

This page analyzes the most important Florida court decisions on converting non-exempt assets into a Florida homestead.

Buying a Homestead With Non-Exempt Money

Florida’s homestead exemption has three exceptions, and buying the home to defeat a creditor is not one of them, so a debtor who moves his own money into a home keeps the home.

Havoco of America, Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001). Leading case. On the Eleventh Circuit’s certified question, the Florida Supreme Court held that a homestead acquired with the specific intent to hinder, delay, or defraud creditors is not excepted from article X, section 4. Eleven days after the $15 million judgment, Hill paid roughly $650,000 cash for a Destin home and later filed Chapter 7. Equitable principles reach past the exceptions only where funds obtained through fraud or egregious conduct bought or improved the homestead; the remedy is a lien.

Havoco of America, Ltd. v. Hill, 255 F.3d 1321 (11th Cir. 2001). When the answer came back, the Eleventh Circuit affirmed: Hill’s purchase of a home with non-exempt funds, made intending to hinder creditors, did not overcome the Florida homestead exemption, and the Destin home stayed exempt.

Bank Leumi Trust Co. of New York v. Lang, 898 F. Supp. 883 (S.D. Fla. 1995). Bank Leumi sued the Langs in April 1990 on $1.8 million of guarantees. They sold their New Jersey home that May for $940,000 and bought in Palm Beach Gardens the next month for $522,000; judgment followed in November. The court found the conversion was made solely to defeat creditors, yet held that the homestead exemption has no exception for Florida property acquired to defeat out-of-state creditors. The annuity half went the other way, on the exemptions case-law page.

Chauncey v. Dzikowski (In re Chauncey), 454 F.3d 1292 (11th Cir. 2006). Chauncey received an $80,000 personal-injury settlement through no wrongdoing and paid the $47,430.82 net to her mortgagee before filing bankruptcy. The Eleventh Circuit reversed the equitable lien: the payment, “while blatantly a move designed to deceive her creditors and one made in bad faith, does not rise to the level of fraud, nor does it constitute egregious behavior,” so Havoco controlled. The same payment cost her the discharge under § 727(a)(2)(A) and (a)(3).

Conseco Services, LLC v. Cuneo, 904 So. 2d 438 (Fla. 3d DCA 2005). While an Indiana fraudulent-transfer action was pending against them, the Cuneos sold $8 million of securities, mortgaged their Connecticut home for $2.45 million, and bought a $10.2 million Florida home. A creditor that never supplied the funds cannot state an equitable-lien claim against the homestead, the Third District held, so it cannot show the fair nexus a lis pendens requires. It “is not enough that the Cuneos transferred their nonexempt funds to an exempt asset” to keep the money from creditors.

Quigley v. Kennedy & Ely Insurance, Inc., 207 So. 2d 431 (Fla. 1968), and Heddon v. Jones, 154 So. 891 (Fla. 1934). Havoco rested on both, 790 So. 2d at 1027. In Quigley, judgment debtors kept an adjoining vacant tract bought after the judgment, because confining a debtor to the homestead land he already owned would be contrary to the homestead provision’s intent. Heddon held that moving onto land expressly to homestead it is not legal fraud, and the homestead is not subordinate to a judgment lien merely because the suit was already pending.

In the forfeiture cases, Butterworth v. Caggiano, 605 So. 2d 56 (Fla. 1992), and Tramel v. Stewart, 697 So. 2d 821 (Fla. 1997), the three exceptions were read as the only three; Havoco applied that reading to conversion. Tramel referred the question, and the 1997–98 Constitutional Revision Commission considered an amendment excluding property “acquired with the intent to defraud creditors” and voted it down, 24 to 7. 790 So. 2d at 1022 n.8.

The Fraudulent-Conversion Statutes

Florida’s fraudulent-conversion statutes disqualify the exemptions that chapter 222 itself provides, but a homestead exemption granted by the Constitution is beyond their reach, because a statute cannot narrow it. Two bankruptcy courts, In re Clements, 194 B.R. 923 (Bankr. M.D. Fla. 1996), and In re Hendricks, 237 B.R. 821 (Bankr. M.D. Fla. 1999), had said so before the Florida Supreme Court did.

Section 222.29 defeats an exemption “provided by this chapter” that results from a fraudulent transfer under chapter 726; the homestead exemption is not one of them. Section 222.30 makes a debtor’s conversion of an asset into exempt form fraudulent when made intending to hinder, delay, or defraud a creditor; the claim is extinguished four years after the conversion. Section 726.105(1)(a) reaches a transfer made “with actual intent to hinder, delay, or defraud any creditor,” but § 726.102(2)(b) excludes “generally exempt” property from “asset,” so transferring the homestead itself is not a fraudulent transfer.

The leading case for the rule is Havoco: §§ 726.105, 222.29, and 222.30 have no effect on the constitutional exemption, because the Legislature cannot narrow a constitutional right by statute. 790 So. 2d at 1029–30 & n.13.

Chambers v. Potter (In re Potter), 320 B.R. 753 (Bankr. M.D. Fla. 2005). Leading case for the mechanics. The debtors stipulated that they put a $300,000 non-exempt tax refund down on a $429,000 home “with the actual intent to hinder, delay, and defraud their creditors,” and the trustee could avoid nothing. Section 544 gives a trustee only what a Florida judgment creditor has, and under § 726.105 that creditor cannot avoid a transfer into homestead: statutory exemptions can be avoided under other Florida statutes; constitutional exemptions cannot. The February 2004 petition predated § 522(o).

In re Levine, 134 F.3d 1046 (11th Cir. 1998). Roughly $440,000 of non-exempt property moved into statutorily exempt annuities was avoidable under § 726.105, and the Eleventh Circuit said the homestead precedent had “little bearing” on that case. Havoco read Levine as drawing the line between the constitutional homestead exemption and the statutory exemption for annuities, and the annuity decisions are on the exemptions case-law page.

Volpitta v. Fields, 369 So. 2d 367 (Fla. 4th DCA 1979). Between the announcement and rendition of a $1,011.77 judgment, the debtor quitclaimed his homestead to his parents; the Fourth District reversed the fraudulent-conveyance judgment. A creditor can be defrauded only by the disposal of property he could look to, so a homestead owner may convey the home whatever his motive. The court quoted Sneed v. Davis, 184 So. 865, 868 (Fla. 1938): dealings in exempt property cannot be impeached “even though such dealings are with a purpose to hinder, delay or defraud them.”

Spector v. Spector, 226 So. 3d 256 (Fla. 4th DCA 2017). Sections 222.29 and 222.30 do strip a chapter 222 exemption. The Fourth District reversed an order treating as exempt a life insurance policy the former husband had transferred to his new wife and borrowed against, and remanded for findings on whether he had acted egregiously, reprehensibly, or fraudulently. Its headline holding concerns the alimony creditor’s exception and belongs with the homestead creditor-exceptions decisions.

In re Rensin, 600 B.R. 870 (Bankr. S.D. Fla. 2019). Section 222.30 requires a conversion “by a debtor,” and a conversion “involves an intentional act with the power to follow through,” so a debtor who merely objected to his offshore trustee’s annuity purchases converted nothing. The § 222.30 decisions are collected on the fraudulent-transfer case-law page.

Neither § 222.30 nor chapter 726 creates a claim against a party who merely assists a debtor’s conversion, BankFirst v. UBS Paine Webber, Inc., 842 So. 2d 155 (Fla. 5th DCA 2003).

Fraudulent Transfers and Equitable Liens

Florida courts have refused an equitable lien where the money that went into the house was the debtor’s own, even after finding the transfers fraudulent, because the lien follows money obtained by fraud.

Willis v. Red Reef, Inc., 921 So. 2d 681 (Fla. 4th DCA 2006). Leading case. The Willises took $1,200,000 of the Ocean One sale proceeds and used $490,345.19 to pay off their Boca Raton mortgage. The Fourth District affirmed the chapter 726 findings but reversed the lien, which is confined to homesteads bought with “the fruits of fraudulent activity”; Red Reef had not supplied the payoff money. The court’s summary: “[N]on-exempt assets may be converted into an exempt homestead even if this is done with an actual intent to hinder, delay, or defraud creditors.”

Menotte v. Champalanne (In re Champalanne), 425 B.R. 707 (Bankr. S.D. Fla. 2010). The Champalannes, after defaulting on a guaranty, deeded their California home to their family trust for no consideration. As its trustees they sold that home for $742,459.61, bought a $799,000 Vero Beach home, and deeded it to themselves jointly. The bankruptcy trustee’s avoidance action still failed. Sections 522(o) and (p) do not displace Havoco; they give a trustee grounds to object to the exemption, and an objection, not an adversary proceeding, is the remedy.

Where the money itself was obtained by fraud, the lien attaches; those decisions, Palm Beach Savings & Loan v. Fishbein among them, and the tracing rule are on the homestead creditor-exceptions page. The Fourth District has also affirmed a lien resting on fraudulent-transfer findings and reversed a refusal to foreclose it, Renda v. Price, 347 So. 3d 3 (Fla. 4th DCA 2022), which is collected on that page.

Whether §§ 522(o) and (p) can reduce a non-debtor spouse’s homestead interest is unresolved. Champalanne recorded that In re Walsh, 359 B.R. 389 (Bankr. D. Mass. 2007), said no and In re Kim, 405 B.R. 179 (Bankr. N.D. Tex. 2009), said yes, and it declined to decide the question.

Homestead Caps in Bankruptcy

Everything the Florida cases allow assumes the debtor stays out of bankruptcy, where a court reduces the homestead by whatever he converted into it intending to hinder, delay, or defraud a creditor and caps equity acquired over the last 1,215 days.

Section 522(o) reduces the homestead’s value by whatever non-exempt property the debtor put into it intending to hinder, delay, or defraud a creditor; the ten years run back from the petition date, and hindering alone suffices. Section 522(p) has no intent element: it caps the interest the debtor actively acquired during the 1,215 days before filing, $125,000 in the statute, $214,000 as now indexed, next adjusted April 1, 2028, and the two apply together. Equity rolled over from a prior principal residence in the same State, acquired before that window, is outside the cap.

Section 522(q) applies the same cap to a debtor convicted of a felony showing the filing was an abuse, or owing a debt from a securities-law violation, fiduciary fraud, or civil RICO, grounds with no time limit. The fourth ground is limited to the preceding five years: a criminal act, intentional tort, or willful or reckless misconduct causing serious physical injury or death. The cap yields where the interest is reasonably necessary to support the debtor and any dependent.

Section 522(b)(3)(A) comes first: Florida’s exemptions apply only if the debtor was domiciled in Florida for the 730 days before filing, or the prior State’s exemption law governs.

In re Roberts, 527 B.R. 461 (Bankr. N.D. Fla. 2015). Leading case for § 522(o). The debtors liquidated nearly all their non-exempt assets to build a waterfront “dream home” while renewing two commercial loans they never meant to pay. After a two-day trial the court held that § 522(o) preempts Florida’s constitutional exemption under the Supremacy Clause and reduced the exemption by $394,875.28. Badges of fraud remain the method and extrinsic evidence is still required, but “a confluence of badges can constitute conclusive evidence of an actual intent to defraud,” the court said.

In re Cook, 535 B.R. 877 (Bankr. N.D. Fla. 2013). Five or six months before filing, the Cooks put a $184,769 tax refund into a $155,000 down payment and repairs on an $800,000 home. On remand the § 522(o) objections were overruled again. Converting non-exempt property into exempt property, even while insolvent, is not evidence of intent; extrinsic evidence beyond the badges is required. The intent date is the acquisition date, not the petition date, and leaving a pre-petition refund off the financial-affairs statement is not extrinsic evidence; a refund is not “income.”

In re Osejo, 447 B.R. 352 (Bankr. S.D. Fla. 2011). The court reduced the exemption by $40,959.06 after finding intent to hinder but no fraud, and the finding rested entirely on non-disclosure. The debtor had not disclosed an April 29, 2010 securities sale of $42,309.13 whose proceeds improved the new Pembroke Pines home, two retirement accounts, or a $105,000 receivable. The schedules were amended only on the day of the second § 341 meeting, after the trustee had hired counsel. “Honesty after one is caught is honestly not honesty.” 447 B.R. at 355.

In re Rensin, 600 B.R. 870 (Bankr. S.D. Fla. 2019). The homestead exemption was denied under § 522(o), not § 522(p). The evidence was “overwhelming” that Rensin bought the roughly $940,000 Florida home intending to hinder and delay his creditors; he had paid for it entirely with the proceeds of a never-occupied Maryland residence.

In re Rasmussen, 349 B.R. 747 (Bankr. M.D. Fla. 2006). Leading case for § 522(p). Section 522(p) applies in Florida even though Florida debtors have no election between state and federal exemptions. Each joint debtor gets a separate cap: § 522(m) applies § 522(p) to each debtor, and Florida imposes no per-couple limit. Passive market appreciation is not an interest “acquired,” so only active acquisitions inside the 1,215 days count, and successive ones aggregate.

The Potter and Roberts decisions do not conflict: Potter‘s petition was filed before the 2005 amendments created § 522(o), so the two decisions answer different statutes.

The conversion	Outside bankruptcy	In bankruptcy
Buying a homestead with non-exempt cash to defeat a judgment	Protected: Havoco (Fla. 2001); Bank Leumi (S.D. Fla. 1995)	Reduced if intent to hinder, delay, or defraud is proved: § 522(o); Roberts (Bankr. N.D. Fla. 2015)
Paying a settlement or a tax refund into the home	Protected: Chauncey (11th Cir. 2006); Cook (Bankr. N.D. Fla. 2013)	Turns on intent when the money went in; badges alone are not enough: Cook
Buying the homestead with money obtained by fraud	Equitable lien as far as the money is traced: Havoco at 1028	The same lien; § 522(o) also reaches a conversion meant to hinder, delay, or defraud
A transfer of the homestead itself	Not a fraudulent transfer at all: § 726.102(2)(b); Volpitta (Fla. 4th DCA 1979)	A trustee’s § 544 power gives only what a Florida judgment creditor has: Potter (Bankr. M.D. Fla. 2005)
Equity gained by market appreciation	Protected	Not an interest “acquired,” so § 522(p) does not reach it: Rasmussen (Bankr. M.D. Fla. 2006)
Equity rolled over from a prior Florida home	Protected	Outside the 1,215-day cap: § 522(p)(2)(B)
Moving to Florida and buying within two years	Protected once the home is homestead	The prior State’s exemption law applies: § 522(b)(3)(A) (730 days)
The same conversion as a ground to deny discharge	Not applicable	Discharge can be denied for the transfer that failed to defeat the exemption: Chauncey (11th Cir. 2006)

Keeping the House and Losing the Discharge

The same transfer that fails to defeat the Florida homestead exemption can still cost the debtor his discharge in bankruptcy, and the Eleventh Circuit has done both in a single case.

Chauncey v. Dzikowski (In re Chauncey), 454 F.3d 1292 (11th Cir. 2006). Leading case. The Eleventh Circuit reversed the equitable lien under Havoco and affirmed the order denying her discharge under § 727(a)(2)(A) and (a)(3), both turning on the same $47,430.82 payment to her mortgagee. The house survived; the debts did not go away.

The Cooks’ discharge had already been denied by default under § 727(a)(2)–(5), and the court still decided the exemption objection on its merits; a default judgment denying discharge is not res judicata on the exemption. The Roberts court also recited In re Jennings, 332 B.R. 465 (Bankr. M.D. Fla. 2005). There a $130,000 payment to a homebuilder nine days before the petition, $85,000 more than was owed, cost the debtor his discharge, and the district court and the Eleventh Circuit affirmed.

Outside bankruptcy a debtor keeps everything Havoco allows, and state-court enforcement preserves more protection than a bankruptcy filing; the planning guidance is on buying a homestead to protect assets and homestead in bankruptcy.