Another Take on Florida's Wild Card Exemption in Bankruptcy

In the recent case of in re Kehoe, the Chapter 7 Trustee filed an Objection to a Debtor's Claim of Exemptions against the Debtor. The Debtor owns his home as a tenant by the entireties (TBE) with his wife. And, they used the TBE exemption to fully exempt the marital house. The Debtor did not claim a homestead exemption for the home. Instead, he applied the $4,000 wild card exemption to a car he owns individually.

Entitlement to Use Wild Card Exemption

The Trustee objected to the vehicle’s $4,000.00 exemption claim. The basis was that the Debtor is receiving the benefits of a homestead exemption. Thus, they do not qualify for the $4,000 Wild Card exemption. The Debtor asserted that he has a right to utilize the wildcard exemption because of two things. One, he neither claimed nor is receiving any benefits from the homestead exemption. Two, the Debtor and his wife have no joint debts. So this case presents no issue of the Trustee being impeded from administering a jointly owned asset where joint debts exist.

The issue to be determined was whether the Debtor, through the homestead exemption's self-executing nature, was somehow receiving the benefits of the homestead exemption.

The Court found that while the Debtor's non-filing spouse retained her homestead rights in the property, such retention does not in any way prevent the Chapter 7 Trustee from administering any TBE property for the benefit of joint creditors. The Chapter 7 Trustee may not administer the TBE property because no joint debts exist. The Debtor was not, in any respect, receiving the benefits of the homestead exemption. And, they were entitled to claim the $4,000 wild card exemption.

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