Judge Jennemann rules that living in hotel where Debtors work does not result in abandonment of homestead

The trustee in In re Patel, 2021 Bankr. LEXIS 2897, Case No 6:18-bk-00036-KSJ (Bankr. M.D. Fl. 20 October 2021) had initially abandoned the property after discussing the residence situation at the 341 meeting, but then sought to withdraw the abandonment three years later.  While the court noted that the trustee failed to show fraud or newly discovered evidence warranting revocation of the abandonment, the court went on to note that it would have allowed the exemption regardless.

The hotel, owned by Debtors’ daughter, was about 200 miles from the homestead property.  Debtors manage the hotel for the daughter.  The court noted that abandonment divests the estate of control of abandoned property, revesting title in the debtor.  Abandonment pursuant to a notice under §554(a) or (b) is generally considered ‘strictly irrevocable’ unless the debtor has been given incomplete or false information, thus foregoing a proper investigation of the asset.1  In ruling on a request to revoke abandonment of an asset, courts apply Rule 60(b), Federal Rule of Civil Procedure made applicable in bankruptcy by Federal Rule of Bankruptcy Procedure 9024.  This rule provides that a court may relieve a final judgment for reasons including newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b), and fraud, misrepresentation, or misconduct by an opposing party.

The court found that the debtor’s testimony at the 341 meeting and at the trial on the trustee’s request to withdraw the abandonment was remarkably similar, and found no contradiction or fraud warranting revocation of the abandonment.  The court went on to find that under Florida law, in order to abandon a homestead, the debtor must state an intention to abandon the homestead property and have an intent not to return to the property.2  Absence from a homestead that is involuntary or compulsory, or which arises out of health, financial, or family reasons, does not constitute a relinquishment of homestead rights.3  As the Debtors live at the hotel because it is necessary for their jobs, they have not relinquished their homestead rights, and such property would retain its homestead exemption.

In re Fuller, 682 B.R. 852, 858 (Bankr. S.D. Ind. 2020) citing Catalano v. Comm’r, 279 F.3d 682, 686 (9th Cir. 2002).

In re Beebe, 224 B.R. 817, 820 (Bankr. N.D. Fla. 1998).

In re Ballato, 318 B.R. 205, 210 (Bankr. M.D. Fla. 2004).


Michael Barnett

Michael Barnett, PA
506 N Armenia Ave.
Tampa, FL 33609-1703
813 870-3100