Thursday, December 22, 2011

Y is for Yacht


The letter “Y” is for Yacht. That's right! Can I keep it? Am I off my rocker? After all, we are talking about bankruptcy right? Well, some people, though admittedly not many, have boats, or a yacht, that end up filing a personal bankruptcy.

One of the questions I ask at every consultation is whether or not he or she has any cars, boats, planes, or recreational vehicles. Most, including me at times, think this question is overkill. However, being in Florida, it is not uncommon for debtors to have boats.


A bankruptcy trustee recently won court permission to hire real-estate and yacht brokers to sell the assets of Frederick Darren Berg. Berg’s mansion in Mercer Island, Wash., is listed at $8.2 million, according to the Seattle Business Journal. Located on Lake Washington, the 5,400-square-foot house has four bedrooms, six baths, six fireplaces, a hot tub, wine cellar, wet bar and two kitchens. That’s not to mention its city and mountain views, boat dock and covered parking for four vehicles.

Also up for grabs is Berg’s 70-foot Holland yacht, the Screaming Cora, which Berg says is worth $800,000. Sale proceeds will pay off Berg’s creditors, including Sun Trust Bank (owed $797,450 on a boat loan secured by the yacht) and Commerce Bank of Washington (which holds the $4.38 million home mortgage). [emphasis added]

So, yes, there is at least this bankruptcy proceeding that included a yacht. Normally, boats and planes in the name of the debtor are not exempt from the bankruptcy process. The trustee would take the asset and sell it (assuming there is equity in the asset) in order to distribute the proceeds to creditors.  Of course, in that case, the Trustee is thinking of Y as meaning "yield".


In Florida, however, if someone was living on there boat, or in there RV, they might be able to claim the asset as their homestead property. You see, the Florida Constitution provides for unlimited homestead protection, and though there are not many cases involving yachts being claimed as homestead property, there are a few cases involving boats. Unfortunately, there is not a bright line as to what can be claimed as homestead property, and what can not be claimed as homestead, though the cases provide some very useful insight into how the courts will rule.


So, if you have a yacht, or RV, that you live in, and are curious about whether you will be able to keep the asset after filing bankruptcy, you should consult with a bankruptcy attorney in your area.


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3 comments:

  1. Yachts is too expensive. Only the middle to high people can afford yacht. Yachtmaster

    ReplyDelete
  2. But if you live on the "Yacht", and the boat is your home, as in your homestead, is it still too expensive?

    ReplyDelete
  3. Hire a Yacht in Dubai Very nice and great information you shared i need some information about

    ReplyDelete