Bankruptcy Court Rules Exemption Planning Doesn’t Justify Exemption Disallowance Unless there is Fraudulent Conduct

Bankruptcy Court Rules Exemption Planning Doesn’t Justify Exemption Disallowance Unless there is Fraudulent Conduct

On June 14, 2019 the Bankruptcy Court for the Western District of Wisconsin overruled the chapter 7 trustee’s objection to a claimed exemption.

Prior to filing their bankruptcy, the Debtors sold non-exempt property including stock and four parcels of real estate. They deposited the funds ($177,000.00) in a Prudential annuity account. Fourteen (14) days later, the Debtors filed a chapter 7 bankruptcy and claimed the funds as entirely exempt under Wisconsin’s retirement benefits exemption.

The Trustee objected to the allowance of the exemption under the Wisconsin retirement benefits exemption and under Wisconsin law denying an exemption “if, in the discretion of the court having jurisdiction, the debtor procured, concealed or transferred assets with the intention of defrauding creditors.” Wis.Stat. § 815.18(10).

The court held that the annuity qualified as a valid retirement benefits exemption. The Court examined under federal law whether exemption planning constitutes a fraudulent act.

Log In to READ MORE

Please note, in order to view NACBA Member Content, you must sign in and then visit NEWS. If you are not a NACBA member, you may Become a NACBA Member 

No Comments

Post a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.