Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
1) Have your in-laws filed for Homestead protection for the house separately from the Bankruptcy case?
2) How much equity does the home have? (Equity = current market value minus the balance - if any - of any mortgage(s) on the home.)
Then is the trustee challenging the homestead exemption because your in-laws rent out their home for a few weeks in the summer, and that therefore the property is commercial rather than residential?
The primary residence is the place where the debtor was at for 183 days out of the last 365 days. If the debtor was not in any one place for at least 183 days, then the primary residence can be the place where the debtor was for more time than any other place in the past 365 days.
If the trustee can prove to a Bankruptcy judge that the home is not the primary residence for both of them, it will be hard to get the home abandoned.
Some of the ways to prove the length of time spent at the home is with cell phone bills, credit card bills, bank statements, and anything else that can be used to help determine if the debtors were in their home for the requisite amount of time.
Having gone to the house on one or two occasions when they were not there proves nothing, and the same is true for their renting the place for a few weeks, as there is no requirement that a primary residence not be rented out.
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