Homestead Protection Survives, Although Impaired

Debtors in Florida, Texas, Kansas, Iowa, and South Dakota may currently shelter the entire value of their homestead when they file for bankruptcy.

This protection has withstood, with limits, recent attacks.  Under legislation pending in Congress, the homestead exemption would be limited to $125,000 but only if the debtor purchased the homestead within 40 months of filing for bankruptcy.  The unlimited exemption would still apply if the debtor owned the homestead for longer than the 40 month period.