New Bankruptcy Homestead Exemption Law

The procedure for claiming a homestead exemption under New Bankruptcy Act has changed. All homestead exemptions are now preempted, with a maximum ceiling established by federal law. However, if state exemptions provide a lower maximum ceiling than the new federal law, the state statute applies. Bankruptcy courts must approve of all exemptions claimed, and are particularly concerned with the evaluation of appraised value. Market price, standing alone is highly subjective. Expect trustees and courts to require substantial justification of all appraisals.