In re: Jaswinder Singh Bhangoo

Facts: A creditor obtains a money judgment and records an abstract which places a lien on title to the judgment debtor’s residence. The debtor vacates the residence and leases the property to a tenant. The debtor files a petition for bankruptcy protection claiming an automatic homestead exemption. A month following their petition, the tenant vacates and the debtor moves back into the residence.

Claim: The debtor claims they are entitled to an automatic homestead exemption since their absence from the residence was temporary, and the debtor always intended on returning to the subject property.

Counterclaim: The creditor claims the debtor is not entitled to an automatic homestead exemption since the debtor or their family did not continuously occupy the property from the date the lien was recorded to the date of the bankruptcy petition, and the debtor’s absence was not temporary as they showed no intent to move back prior to the date of the bankruptcy petition.

Holding: A United States Bankruptcy Appellate court holds the debtor’s equity in the residential property is not protected by an automatic homestead exemption since the debtor’s absence was not temporary as the debtor showed no intent to move back before the date of the bankruptcy petition. [In re: Bhangoo (9th Cir. BAP 2021) 634 BR 80]

In re: Jaswinder Singh Bhangoo

Related Reading:

Legal Aspects of Real Estate Chapter 33: Automatic and declared homesteads

Related Form:

Declaration of Homestead – RPI Form 465