Creditors often find themselves at the crossroads of multiple disciplines of law, such as the intersection of bankruptcy and tort law. Less commonly, however, creditors may find themselves at the intersection of bankruptcy and immigration, but the ramifications of this meeting of laws are significant, especially when a debtor’s immigration status may significantly affect the bankruptcy estate.

Without a doubt, the intent to permanently reside in Florida is the lynchpin of the Florida homestead exemption. Courts within Florida, at the state and federal level, have historically held that a non-immigrant alien without a permanent visa is legally incapable of forming the necessary intent to remain permanently in Florida, and was, therefore, not entitled to a Florida homestead exemption.

In the bankruptcy case of In re Boone, a Chapter 7 debtor, who was a Canadian citizen at the time of her arrival to the United States, failed to maintain her work status on her temporary visa. Then chief-judge Paskay held that because of the status of the debtor as a non-immigrant alien whose stay was temporary, the debtor was precluded from claiming its residence as homestead located in the United States. Judge Paskay’s reasoning was simple: because the debtor lacked the legal right to permanently reside in Florida, and under these circumstances, she could not legally formulate the requisite intent required by the homestead exemption. Boone is in direct accordance with the Florida Supreme Court’s decision in Cooke v. Uransky.

Nevertheless, the fact that a debtor is in the country on a temporary visa is not, alone, dispositive. In the 2011 case of Grisolia v. Pfeffer, the Third District Court of Appeals found that application for permanent residence was “sufficient to demonstrate [debtor’s] intent to permanently reside in Florida,” thereby allowing the debtor to claim a homestead exemption.

Although this issue of legal intent will present itself only in a limited number of creditor’s rights and bankruptcy cases, it is potentially a lucrative tool for Florida’s creditors to overcome the otherwise available homestead exemption.