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My Dad, age 86, has several hundred thousand dollars in medical

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My Dad, age 86, has several hundred thousand dollars in medical bills from he and his now deceased wife, as well as credit card debt under $5000. He just sold his home in Florida, however because of the market, he will only have about $40,000 equity. He needs this money for his medical care. He has started the proceedings to file bankrupcy and was told by this attorney that he could take the money from the house and put it in an account titled "funds from homestead" and it would be protected. I know that you can't lose your home in a bankrupcy, but I've never heard of this before. I'm concerned that he has either been mis-informed or that he has mis-understood. Is this correct?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  FiveStarLaw replied 4 years ago.
Hello,


Thank you for your question.

There is a long line of cases that have held that Florida’s homestead exemption extends to any proceeds of a voluntary sale of homestead real property, if the proceeds are
segregated and the debtor intends to reinvest the proceeds in a new homestead within a reasonable time. In re Englander, 95 F.3d 1028 (11th Cir. 1996);Orange Brevard Plumbing & Heating Company v.LaCroix, 137 So.2d 201 (Fla. 1962); Sun First
National Bank of Orlando v. Gieger, 402 So.2d 428(Fla. 5th DCA 1981).
Customer: replied 4 years ago.
What is the reasonable time? And can he use that money for his ongoing medical expenses. When he passes, what happens to that money if it has not been re-invested into another homestead?
Expert:  FiveStarLaw replied 4 years ago.
Hello,

You raise very important questions to which there is no easy answer. It could be determined that because of your father's age and health that he does not have an intention to reinvest into another homestead. To avoid this potential problem, your father will want to consider filing bankruptcy prior to the closing of the sale
Customer: replied 4 years ago.
If he files first and then closes on the house, can they not come after the money? Or will there be a lien on the house?
Expert:  FiveStarLaw replied 4 years ago.
if he files prior to the closing, the creditors cannot attach the money from the closing and there will not be a lien on the house. Homestead in Florida is exempt from claims of creditors
FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36494
Experience: Bankruptcy Lawyer. Experienced.
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