Hundred year-old Florida homestead laws protect the family home from loss due to debts. These laws were instituted in the late 19th century to protect early dirt poor settlers of Florida from losing their homes.
Many wealthy individuals have taken advantage of these laws by electing to shelter capital in an expensive Florida home before declaring bankruptcy. Notables who have utilized this loophole include actor Burt Reynolds and former Major League Baseball Commissioner Bowie Kuhn.
Recent federal legislation will put limitations on this practice by capping the homestead exemption amount at $125K for homes purchased within 40 months of declaring bankruptcy.
This is a badly needed change that will help creditors recover debts on a more equitable basis.
Mansion owners won't be able to dodge creditors in Florida anymore [Sun-Sentinel]