Bankruptcy Court Says A Person Can Have Only One Homestead At A Time

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Authored by James V. Block

On February 26, 2015, the U.S. Bankruptcy Court for the Western District of Wisconsin sustained a chapter 7 panel trustee’s objection to debtors’ claim of exemptions under Wisconsin’s homestead exemption in two parcels of real estate in In re Minor, Bankruptcy Case No. 14-13002, Feb. 26, 2015. The Debtors filed a joint voluntary Chapter 7 bankruptcy and claimed as exempt two parcels of real estate under Wisconsin Statute Section 815.20: Lot 1 was 8 acres with a 2-bedroom residence. Lot 2 was 10 acres with a 2-bedroom residence. The lots did not share a common boundary and are in two different counties.

The Debtors argued that under their circumstances “two dwellings on two separate tracts of land constitute a homestead”. The Bankruptcy Court noted that “The question is whether Lots 1 and 2 qualify as a single homestead because of the way the Debtors use them by going back and forth between the two and, at times, separately occupying both properties.”

The Bankruptcy Court noted a distinction between debtors owning multiple homes and claiming one homestead citing to the Wisconsin Supreme Court’s decision in Jarvais v. Moe, 38 Wis. 440, 446 (Wis. 1875): “A homestead is the place of the dwelling house; the land contiguous and appurtenant to a home. A person may live in successive homes, but can have one home only at one time. He may have several houses at once, but one only can be his home at a time.”

Despite the Debtors argument that the definition of the homestead under Wisconsin law evolved to cover their living situation, the Bankruptcy Court found no case law or statute eliminating the “one homestead rule” established in Jarvais. The Bankruptcy Court found that under the Debtors’ circumstances the Wisconsin homestead exemption did not encompass both Lots 1 and 2 and sustained the chapter 7 panel trustee’s objection.

If you have financial problems or are considering filing bankruptcy, make sure you have a bankruptcy attorney review whether your home qualifies for the Wisconsin homestead exemption.

For more information about this and other bankruptcy law issues, please contact me by email or call at 715-842-2162.

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