A fee agreement that purports to attach an attorney’s lien on the debtor’s as exempt personal property is unenforceable under section 526(a) where state law allows such liens only on non-exempt property or on exempt personal property for specified exceptions, not including attorney’s fees. In re Turner, No. 22-41570 (Bankr. D. Minn. Dec. 2, 2022). [Read more…] about Post-Petition Fee Agreement a No-Go
Exemption Amount in Lien Avoidance Action
For purposes of lien avoidance under section 522(f), the debtor was able to claim a homestead exemption in the amount of the California exemption in effect at the time of his bankruptcy petition, despite California law that fixed the exemption amount at the time of lien creation. Barclay v. Boskoski (In re Boskoski), No. 22-55098 (9th Cir. Nov. 14, 2022). [Read more…] about Exemption Amount in Lien Avoidance Action
Absent Objection 100% FMV Exemption May Exceed Statutory Cap
A claimed exemption for 100% of FMV is allowed when no party in interest objects even though once the property appreciated post-petition, the exemption was greater than the statutory limit. Masingale v. Munding (In re Masingale), No. 22-1016 (B.A.P. 9th Cir. Nov. 2, 2022). [Read more…] about Absent Objection 100% FMV Exemption May Exceed Statutory Cap
Hockey Player Shoots but Doesn’t Score
The district court found that the “mansion loophole” cap on exemptions provided for in section 522(p) applies even in opt-out states where the debtor does not have the option to choose between state and federal exemptions. It also held that rule 4003(b)(4) does not impose a deadline on notice to the debtor of filing an objection to exemptions. In re Kane, No. 21-8209 (N.D. Cal. Sept. 2022). [Read more…] about Hockey Player Shoots but Doesn’t Score
Exemptions for Joint Tenancy and Separate Living
The debtors were entitled to exempt only their one-half interest in one of the two residences where they owned both properties jointly but the husband lived in one residence and the wife lived in the other. They could avoid the creditor’s judgment lien to the extent the lien impaired those exemptions. In re Snyder, No. 21-31521 (Bankr. N.D. Ohio Sept. 23, 2022). [Read more…] about Exemptions for Joint Tenancy and Separate Living
$1.7 Million Retirement Accounts Not Part of Estate
The court held its nose and slogged through the trustee’s lengthy complaint riddled with errors and legal misconceptions to find that the debtor’s retirement accounts totaling approximately $1.7 million were not property of the bankruptcy estate. McDonnell v. Gilbert (In re Gilbert), No. 21-12725, Adv. Proc. No. 22-1005 (Bankr. D. N.J. Aug. 23, 2022). [Read more…] about $1.7 Million Retirement Accounts Not Part of Estate
Tenancy by Entirety Not Exempt from IRS Debt
The debtor could not exempt property of the estate which he owned as a tenant in the entirety with his non-filing spouse with respect to a debt he owed to the IRS where section 522(b)(3)(B) exempts such property only to the extent it would be exempt under nonbankruptcy law and the Tax Code permits the IRS to collect against the property. Morgan v. Bruton (In re Morgan), No. 21-891 (N.D. N.C. Aug. 12, 2022). [Read more…] about Tenancy by Entirety Not Exempt from IRS Debt
Carve-Out Agreement Creates Exemptible Equity
The debtor was entitled to obtain the benefit of her homestead exemption even though, at the time she filed her petition, she had no equity in the property, where “the secured creditor’s agreement to accept less money upon a sale creates equity in the home where none existed before.” Stark v. Pryor (In re Stark), No. 20-4766 (E.D.N.Y. June 28, 2022). [Read more…] about Carve-Out Agreement Creates Exemptible Equity
Language in Divorce Order Did Not Deprive Debtor of Right to Exemption
The debtor’s interest in her ex-husband’s retirement account was exemptible in her bankruptcy even though the funds had not yet transferred and the Judgment of Dissolution order stated that the funds were to be used to pay off the debtor’s credit card debt. In re Steinke, No. 21-90618 (Bankr. C.D. Ill. June 15, 2022). [Read more…] about Language in Divorce Order Did Not Deprive Debtor of Right to Exemption
No Exemption for IRA Created with Excessive Contribution
A retirement annuity account funded by a rolled-over IRA in the debtor’s name which was in turn funded by a contribution in excess of that allowed for tax exempt status, may not be exempted from the debtor’s bankruptcy estate. In re Farber, No. 21-12147 (Bankr. E.D. Pa. April 26, 2022).
The chapter 7 debtor sought to exempt her Allianz retirement annuity account in the amount of $27,102.57 from her bankruptcy estate. The trustee objected on the basis that the IRA was not subject to exemption under section 522(d)(12), because the debtor inherited the account from her father. [Read more…] about No Exemption for IRA Created with Excessive Contribution