When you file bankruptcy, can you a claim a homestead exemption for the home you are not planning to keep?

Victoria Maydanik News about Bankruptcy Laws

Yes.  In an interesting new update,  U.S. 6th Circuit Court of Appeals recently held in Re Wengerd that the debtors rightfully claimed homestead exemption for their property, even though at the time the bankruptcy petition was field, they had a pending contract to sell the property.

As a side note, these folks would have saved themselves a lot of headache (and legal fees, I am sure) had they not decided to do something so drastic as selling their house around the time of filing of the petition. It appears that the house was sold while their case was still active. To prevent complications of the case, refrain from trying to sell, refinance or transfer any of your property shortly before the filing or while the bankruptcy case is still open – or at least consult your attorney beforehand if you are considering this, to see what the best approach would be.