Cydney, a Florida resident, owns a home worth $225,000 that is subject to a $150,000 mortgage and a judicial lien of $50,000. The homestead exemption in Florida is unlimited, as long as the homestead meets the federal requirement that its equity was acquired at least 1,215 days before a bankruptcy filing (otherwise the exemption would be limited to $125,000.)
Cydney should consider paying off her $150,000 mortgage. By doing this, she will convert $150,000 of cash into an exempt asset--her home. She will be able to remove the $50,000 judicial lien attached to the property because this liens will be deemed to impair her homestead exemption.