Alfred Thomas Rasmussen, Case No. 8:05-bk-20277-MGW
Debtor. Chapter 7
AMICUS BRIEF IN OPPOSITION TO OBJECTION TO EXEMPTIONS
A review of the Bankruptcy Abuse Prevention and Consumer Protection Act (hereinafter BAPCPA) fails to give any support either the Trustee’s theory that the allowed exemption provided in §522(p)(1) does not stack in a joint case; nor that appreciation in the homestead property occurring after purchase counts towards limiting such exemption.
I. Stacking of §522(p)(1) exemptions
A. Theory of Joint Case
Joint administration of a bankruptcy case is a procedural tool permitting use of a single docket for administrative matters, including the listing of filed claims, the combining of notices to creditors of the different estates, and the joint handling of other ministerial matters that may aid in expediting the cases. Advisory Notes, Bankruptcy Rule 1015. In re Reider, 31 F.3d 1102, 1109 (11th Cir. 1994). Used as a matter of convenience and as a cost saving device, it does not create substantive rights. Unsecured Creditors Committee v. Leavitt Structural Tubing Co., 55 B.R. 710, 712 (N.D.Ill., 1985), Cited Reider 31 F.3d at 1109.
not changing substantive rights, the joint administration of a bankruptcy case
with a husband and wife cannot reduce the exemptions to which they would
otherwise be entitled. This is further
supported by §522(m) providing that exemptions shall apply separately with
respect to each debtor in a joint case.
While this section was amended in 1984 to prevent one joint debtor from
choosing federal exemptions while the other chose state exemptions; both
debtors are still permitted to assert an exemption against the same item of
property, effectively doubling the exemptable amount
in that item. 2 William L. Norton, Jr., Norton
Bankruptcy Law and Practice 2nd §46:4 (2005) citing John
T. Mather Memorial Hosp. of Port Jefferson, Inc. v.
If the Debtors had filed separate individual cases, each would be entitled to exempt their ½ interest in up to $250,000 total value in a homestead. This would also be true if the property was owned by non-married individuals who all were entitled to claim the property as homestead. There is no basis to penalize the Debtors for filing a joint case, or even less to discourage marriage by disallowing homestead exemptions for married couples when an unmarried couple in similar circumstances would be entitled to the exemption.
II. Appreciation in value not subject to §522(p) limitations
facts in this case show a rollover of $35,331.75 equity in a prior
provides that a debtor ‘may not exempt any amount of interest that was acquired
by the debtor during the 1215-day period preceding the date of the filing of
the petition that exceeds in the aggregate $125,000 in value’ in the homestead
(emphasis added). The Oxford English
Dictionary defines interest as ‘[t]he fact or relation of being legally
concerned; legal concern in a thing;
esp. right or title to property, or to some of the uses or benefits pertaining
to property (emphasis supplied). 7 J.A.
Simpson and E.S.C. Weiner, Oxford English Dictionary 1099 (2nd
Ed.) reprinted in The Compact
enacting the limitations on homestead, Congress was concerned with Debtors
moving to a state with a large exemption in order to obtain exemptions that
they were not entitled to in the prior state.
As quoted in In re Kaplan, 331
B.R. 483, 488 (Bankr. S.D.
support is found in In re Wayrynen, 332 B.R. 479 (Bankr.
The gravamen of § 522(p)(1) is to limit the ability of individuals desiring to take advantage of the lenient exemption provisions of "debtor-friendly" states by relocating to such states. h.r. rep. no. 190-31, pt. 1, at 102 (2005). To the contrary, the "safe harbor" language of § 522(p)(2)(B) would appear to have been intended to afford protection to individuals like the Debtor who, rather than seeking to take advantage of Florida's exemption provisions to shelter illicitly- or improperly-obtained funds, simply have benefitted (sic) as a result of their ownership of Florida real property and the general appreciation of property values attributable to previous intra-state transactions.
The only case directly on this point rejects the
Trustee’s argument that appreciation is subject to §522(p) limitations. In In
re Blair, 334 B.R. 374 (Bankr. N.D.
The Trustees argument is contrary both to the legislative history and with the weight of case law decisions to date. There is no policy argument to jeopardize homesteads of individuals who have lived in the state for years and who, through no fault of their own, are subject to appreciating real estate values. Further, there is no basis to penalize joint debtors when if they had filed individual cases, each would be able to exempt their ½ interest in $250,000 equity in a homestead. In the absence of a cognizable legal or policy argument, the trustee’s objection must fail.
Michael Barnett, P.A.
by_/s/ Michael Barnett______________
Fla. Bar # 500150
Tel. (813) 870-3100
Facs. (813) 877-4039