April 27, 2009
Supreme Court Grants Cert on Exemptions Case, Schwab v. Reilly
Today, per ScotusBlog.com, the Supreme Court granted cert in Schwab v. Reilly, Docket: 08-538, to be argued next term.
Issue (grant limited to questions one and two):
1. When a debtor claims an exemption using a specific dollar amount that is equal to the value placed on the asset by the debtor, is the exemption limited to the specific amount claimed, or do the numbers being equal operate to “fully exempt” the asset, regardless of its true value?
2. When a debtor claims an exemption using a specific dollar amount that is equal to the value placed on the asset by the debtor, must a trustee who wishes to sell the asset object to the exemptions within the thirty day period of Rule 4003, even though the amount claimed as exempt and the type of property are within the exemption statute?
The Third Circuit Court of Appeals ruled for the debtor saying:
We decide whether a Chapter 7 trustee who does not lodge a timely objection to a debtor’s exemption of personal property may nevertheless move to sell the property if he later learns that the property value exceeds the amount of the claimed exemption. Where, as here, the debtor indicates the intent to exempt her entire interest in a given property by claiming an exemption of its full value and the trustee does not object in a timely manner, we hold that the debtor is entitled to the property in its entirety.
Given the Supremes propensity for reversing circuits, this might not be good. You can access the 3rd Circuits opinion here.
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Is this a case of good facts make good law... hopefully?
Unlike Marrama.... !
Posted by: John Rogers | May 26, 2009 10:13:01 AM