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Prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, many people would, before filing for bankruptcy, move to another state that had a more generous homestead exemption than the one they were living in. The new law has much stricter requirements as to which state's home exemption you can use. However, if you live in a state that allows the choice of federal exemptions, then you can choose the federal exemptions regardless of how long you were living in the state.
If you have lived in your home for at least 40 months before filing, or if you have lived in your home for less than 40 months, but purchased it after selling another home in the same state that you lived in more than 40 months earlier, then you can use your current state's exemption. However, if you have been convicted of a felony, a securities violation, or an intentional tort that caused severe bodily injury or death, then your homestead exemption may be limited to $125,000. If your state's exemption is greater than this, then the judge will determine whether to apply the limit.
If you acquired your home within the previous 40 months and have lived in the state for at least 2 years, then you can use that state's exemption up to $125,000.
If you have lived in your state for less than 2 years, then you must use the exemptions of the state-up to $125,000-in which you lived the longest in the 180 period before the 2 years before filing-in other words, in the time period of about 2 to 2 ½ years before filing for bankruptcy.
If you have disposed of any nonexempt assets in the 10 years before filing to protect it from creditors, then your exemption may be reduced by the value of the assets.
I have lived in AZ for 1.5 years and I am unsure if I can use their homestaed exemption. In that case do I use California's (my previous residence) for exemption amounts and does that mean I should hire a CA BK attourney to file.
So if a judgement or lein is placed before the BK homestead exemption is in place could I be forced to liqidate my home?
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