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Each state maintain authority over real property laws, or so it
seemed for 229 years. In 2005, a new federal law supplanted the Florida Homestead Exemption Act,
and established a value limit on covered property. In the past, debtors
filing bankruptcy were allowed to claim Florida homestead exemption law,
up to an unlimited value, and keep homes and improvements when
discharging debts through Chapter 7. After the new bankruptcy laws and
amendments became effective (in late 2005), federal law now limits
homestead value to $125,000. Under state law and for suits filed by
creditors, the Florida homestead exemption form is still
effective, yet in federal court, creditors who force debtors into
bankruptcy may now recover against excess value.
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