Personal Property and Homestead Mix-Up

It has been ruled that homestead exemption pertains to the profits that come from personal property that has been sold with a house with the exception that the money was set apart from the sale or it was used to repay creditors. This means that money that comes from personal items is classified under a homestead exemption, while a house is not exempt. This ruling alters a decision that had previously been made by a judge who realized that the earnings from the individual property were not connected to the homestead.

Thus, the judge agreed that the exemption was not applicable. The person in debt sold his home along with several items of personal property and combined the money. He paid off the first mortgage and the rest was placed in his savings account. When he filed for bankruptcy, the declared homestead exemption in order to keep the remaining money that was left in his savings. There was an objection that they money in the savings account was mixed in with the profits from the personal property that was not exempted through the law. The objection was sustained, and the court found that a small portion of the savings came from personal property, and thus, the decision was reversed.

The U.S. Bankruptcy Appellate Panel established that the man in question had proven that there was enough evidence to warrant an investigation regarding the intent to change his non-exempted funds to homestead property. This was because he combined the money in one account without any separation between the two. The only error was that they were not able to find evidence of a definite conversion of money.

There was also an error when the BAP said that the person in question had meant to convert the property funds that were not exempt, because it had not proven it as a fact. The court agreed that the decision had to be reversed. However, the court said that the trustee did not show that the money from the house and personal property were ever truly divided or that the proceeds of the homestead were used to reimburse the mortgage. It was decided that the trustee did not show the man’s money that was put in savings came from the profit of personal property that was not exempted, and the case was returned to court for continued arrangements.

Rosenstein Law Group has the experienced staff that knows your struggles, and they are ready and waiting to help you find a solution. Their answers are straightforward, and their solutions are effective. At Rosenstein Law Group, they have people waiting 24 hours a day, every day to take your phone call. Their number is 480-248-7666. They are knowledgeable, skilled, and waiting for you to call so that they may help you through this time of hardship and back on the path to prosperity.

 

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