Circuit Court: Debtor Claiming Federal exemptions under § 522 of the Bankruptcy Code May Exempt a 100% Interest in an Asset in Certain Situations

Circuit Court: Debtor Claiming Federal exemptions under § 522 of the Bankruptcy Code May Exempt a 100% Interest in an Asset in Certain Situations

This appeal presents questions relating to the scope of a Chapter 13 debtor’s claimed exemptions under § 522 of the Bankruptcy Code.

On December 1, 2015, the Advisory Committee on Bankruptcy Rules adopted a new Schedule C form. This form allows Chapter 13 debtors, by checking the appropriate box on the form in the column titled “Amount of the exemption you claim,” to exempt from the bankruptcy estate “100% of fair market value, up to any applicable statutory limit” of certain property. When
filing her Schedule C, Debtor  checked this box indicating her intent to exempt “100% of fair market value, up to any applicable statutory limit” for 14 of her 17 exemptions. In the column titled “Specific laws that allow exemption,” Debtor identified 11 U.S.C. §§ 522(d)(1), (3)–(5), which cap the value of a debtor’s interest that may be exempted at a designated statutory
limit.

Following the Schedule C filing, the parties engaged in multiple rounds of objections, hearings, and orders. Ultimately, the district court allowed Debtor’s amended exemptions that claimed “100% of fair market value, up to any applicable statutory limit” of certain assets, but only after she also listed a claimed amount within the statutory limit in the “Specific laws that allow exemption” column. The parties then jointly requested certification to directly appeal the court’s order allowing Debtor’s amended exemptions. The bankruptcy court certified a specific question for appeal, and this court granted such leave.

The bankruptcy court certified the following question: “May a debtor claiming federal exemptions under § 522 of the Bankruptcy Code ever exempt a 100% interest in an asset?”

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.