Calling the agreement a “sham,” the district court affirmed the bankruptcy court’s denial of a carve-out agreement between the chapter 7 trustee and the state and federal tax creditors. The court found the agreement would adhere to no one’s benefit but their own. The court also upheld the bankruptcy court’s finding that the debtor’s homestead exemption applied to section 724(b). Summerlin v. Turnage (In re Turnage), No. 22-122 (W.D. N.C. March 14, 2023). Read More
Tag Archive: Exemptions
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“Sham” Carve-Out Agreement Rejected
Posted by NCBRC - March 29th, 2023
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Trustee Entitled to Attorney’s Fees for Exemption Dispute
Posted by NCBRC - March 14th, 2023
Where the debtor’s original exemption claim was for bodily injury, the trustee had a reasonable argument that the actual post-petition settlements of her personal injury case, which specified that they were for non-bodily-injury damages, did not fall under that exemption. Because the trustee’s objection related to the post-settlement exemption claim, it was timely. Biondo v. Gold, Lange, Majoros & Smalarz, P.C., No. 22-1666 (6th Cir. Feb. 8, 2023). Read More
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Good Faith in Failure to Disclose Lawsuit
Posted by NCBRC - February 27th, 2023
Where the debtor failed to amend her schedules before her case was closed, she forfeited the right to do so as a matter of course, but based on the facts and circumstances in this case, the debtor’s neglect was excusable. The court allowed her to reopen her case to claim an exemption in a personal injury settlement. In re Wantz, No. 18-2851 (Bankr. W.D. Mich. Jan. 5, 2023). Read More
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State Law Does Not Create Exemption in Trust
Posted by NCBRC - January 18th, 2023
A state statute protecting a trust from judgment creditors is not an exemption statute for bankruptcy purposes where it was not designated as such and it did not provide unequivocal protection against all forms of collection. In re Morris, No. 21-30468 (Bankr. N.D. Ill. Jan. 13, 2023). Read More
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Post-Petition Fee Agreement a No-Go
Posted by NCBRC - December 7th, 2022
A fee agreement that purports to attach an attorney’s lien on the debtor’s 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
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Exemption Amount in Lien Avoidance Action
Posted by NCBRC - November 30th, 2022
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
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Absent Objection 100% FMV Exemption May Exceed Statutory Cap
Posted by NCBRC - November 8th, 2022
A claimed exemption for 100% of FMV is allowed when no party in interest objects despite the fact that 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
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Hockey Player Shoots but Doesn’t Score
Posted by NCBRC - October 12th, 2022
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
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Exemptions for Joint Tenancy and Separate Living
Posted by NCBRC - October 5th, 2022
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
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Tenancy by Entirety Not Exempt from IRS Debt
Posted by NCBRC - August 17th, 2022
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
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