This is an old story, but it’s new to me. I stumbled upon it because there was a recent update on The Consumerist. The best summary of the case that I’ve seen is here, on Good Morning America’s Website, in a story from May, 2008.
Apparently, in 1995, Sonya Ramos took her daughter to the dentist, which resulted in a $68 (that’s sixty eight dollar) bill that was left unpaid. At some point, a collections agency sued her for the bill, which due to legal fees and other costs had increased to $950. Either she didn’t know about the lawsuit or she ignored it, but from my perspective, it doesn’t really matter. The collections agency that owned the debt won a default judgement. The judge then ordered the sheriff to sell some of her property to pay the judgement. According to the story, under Utah law (with which I am unfamiliar), because her home was “indivisible,” it was sold to a buyer for $1,550.
The rest of the story and the follow ups are about her continuing efforts to reclaim possession of her home. If you are interested, read the Good Morning America story linked to above, or the most recent update to the story in today’s Consumerist, which states that Utah Court of Appeals remanded the case to determine whether or not she had received proper notice of the sale and whether the sales price is grossly inadequate.
I’m glad that I, and my clients live in Florida. Whether she had adequate notice of not, or whether the sales price is grossly inadequate or not, Utah law allowed her home to be sold because of an outside debt.
Let’s take a look at the Florida Constitution:
Article X, Section 4 provides:
(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family.
In Florida, you homestead is protected from judicial sale and from creditors. Period. There are exceptions for debts related to the property such as your mortgage, taxes, and repairs to the house, but that’s it. The state can’t force the sale of your house to pay your other creditors (there are some minor exceptions regarding new homesteads and bankruptcy up to a certain limit, but that’s for another post).
So if you’re in Utah and facing the loss of your home because of some outside debt. Come to Florida! The weather’s nicer, and your Homestead is protected. However, you can only have one wife.