Type: Amicus
Date: February 3, 2017
Description: Whether debtor has right to an exemption of more than the equity on the day of filing when there is room to capture increased value in exemption.
Result: Pending
Property Tax Refund Not Exemptible
A state property tax refund intended to “provide property tax relief to certain persons who own or rent their homesteads,” is not “government assistance based on need,” for purposes of Minnesota exemptions. Hanson v. Seaver (In re Hanson), No. 16-6023 (B.A.P. 8th Cir. Jan. 6, 2017).
Upon objection by the chapter 7 trustee, the Bankruptcy Court found debtor, Sheri Lynn Hanson, was not entitled to the public assistance exemption based on her refund under the Minnesota Property Tax Refund Act.
On appeal, Ms. Hanson argued that In re Hardy, 787 F.3d 1189 (8th Cir. 2015), which reversed the BAP to hold that the Missouri child tax credit refund was exemptible public assistance, abrogated Manty v. Johnson (In re Johnson), 509 B.R. 213 (B.A.P. 8th Cir. 2014), in which the BAP held that the Property Tax Refund Act was not exemptible as public assistance. The BAP rejected this argument, finding that the Eighth Circuit decision in Hardy was based on its disagreement with the BAP as to whether the child tax credit refund fit the definition of government assistance based on need. Relying on the history of amendments to the statute which were geared toward increasing benefits to poorer taxpayers, the circuit court found that the child tax credit refund fit the definition of public assistance.
Turning to the legislative history of the property tax refund statute, the court found amendments to that Act showed that the legislature had “rais[ed] the maximum eligible household income and lower[ed] the threshold income percentage for higher income individuals.” Taking into consideration the property tax relief statute as a whole, the court noted that other sections were not tied to income. Contrary to Ms. Hanson’s assertion, the court saw “no basis in the legislative history for a finding that the Act was intended to benefit low-income homeowners.” Based on this analysis, the court found that it was bound by the holding in Johnson and affirmed the bankruptcy court decision.
Peake v. Ayobami, No. 16-20589 (5th Cir.)
Type: Amicus
Date: December 20, 2016
Description: Whether post-petition appreciation devolves to a debtor electing federal exemptions when the debtor checks off the 100% FMV box and does not exceed the statutory limitation on exemptions.
Result: Pending
Ayobami NACBA Amicus 5th Cir Dec 2016
Lua v. Miller, No. 15-56814 (9th Cir.)
Type: Amicus
Date: July 25, 2016
Description: Whether equitable estoppel under state law may prevent a debtor’s amendment of claimed exemptions.
Result: Pending
Hardy v. Fink, No. 14-1181 (8th Cir.)
Type: Amicus
Date: November 10, 2014
Description: Whether the refundable component of the federal child tax credit was not exempt as a “public assistance benefit” under Missouri law, and whether the facts were not sufficiently developed below to support a precedential decision.
Result: Reversed June 2, 2015. Debtor won.
Code Preempts State Exemption Exception
When a state law that precludes the application of the debtor’s state-created homestead exemption conflicts with federal bankruptcy law, state law must yield. In re Smither, No. 14-40607 (Bankr. D. Mass. Nov. 30, 2015). [Read more…] about Code Preempts State Exemption Exception
Debtor Equitably Estopped from Claiming Homestead Exemption
The debtor’s unfair manipulation of her state homestead exemption claim justified the denial of the claim under the principles of equitable estoppel. Lua v. Miller (In re Lua), No. 15-04026 (C.D. Cal. Nov. 10, 2015). [Read more…] about Debtor Equitably Estopped from Claiming Homestead Exemption
Harris Precludes Attorney Fee Payments Out of Undisbursed Funds
In two cases involving the courts’ practice of permitting the Chapter 13 trustee to distribute undisbursed funds to creditors upon conversion to Chapter 7, the courts found that Harris v. Viegelahn, 575 U.S. ___, 135 S.Ct. 1829 (2015), dictated a different result, even concerning the debtor’s Chapter 13 attorney fees and without regard to whether the case was converted before confirmation of the plan. In re Beauregard, No. 11-13069, consolidated with, In re Rule-Osburn, No. 14-13624, In re Montano, No. 14-12950 (Bankr. N. M. July 10, 2015); In re Sowell, No. 14-44130 (Bankr. D. Minn. Aug. 7, 2015). [Read more…] about Harris Precludes Attorney Fee Payments Out of Undisbursed Funds
IRA Exemption Lost Due to Prohibited Transaction
The debtors’ use of funds in the husband’s self-directed IRA to fund the purchase and development of property was a prohibited transaction that disqualified the IRA from exemption in bankruptcy. In re Kellerman, No. 09-13935 (Bankr. E.D. Ark. May 26, 2015). [Read more…] about IRA Exemption Lost Due to Prohibited Transaction
Child Tax Credit Refund Exemptible as Public Assistance Benefit
The federal Additional Child Tax Credit is a “public assistance benefit,” that may be exempted in bankruptcy under Missouri exemption law. Hardy v. Fink (In re Hardy), No. 14-1181 (8th Cir. June 2, 2015). [Read more…] about Child Tax Credit Refund Exemptible as Public Assistance Benefit