Get out!

Entrepreneur, Sept, 2002 by Jennifer Pellet

Ready for more Enron fallout? Prompted by public outcry over the many company executives who will keep their multimillion-dollar Texas homes after declaring bankruptcy, Congress is pushing for an end to state homestead exemptions that shield primary residences from bankruptcy proceedings. States like Texas and Florida, where there aren't any limits on the value of the home are primary targets of legislation that seeks to set a national maximum exemption of $125,000.

The bill, which passed the Senate and is now before the House, also calls for debtors to meet a 40-month residency requirement to qualify for an exemption--a provision that could prove onerous to anyone running into financial difficulties after relocating. "And even if the debtor satisfies the 40-month residency requirement, he may still be unable to take advantage of the exemption if he has committed one of a number of enumerated bad acts," says Sen. Herb Kohl (D-WI), who proposed the legislation.

Now that's shutting the barn door and padlocking it--too bad those Enron cows are long gone.

JENNIFER PELLET (jpellets@aol.com) is a freelance writer in New York City specializing in business and finance.