September, 2013 www.astlelaw.com
Kansas Bankruptcy News
A monthly publication for the non-bankruptcy attorney prepared by the Law Office of
Donald C. Astle, Donald C. Astle and Sheila Maksimowicz Attorneys at Law.
345 Riverview Suite 730,Wichita, KS
316.262.7696
Kansas Bankruptcy Court Allows Debtors to Stack Homestead Exemption in Bankruptcy

In Re Rich, 12-10357 (Bankr. D. Kan. Apr. 16, 2013) memorandum opinion by Judge Nugent. Overruling trustees objection to debtors’ homestead exemption.

The debtors obtained their home within 1215 days of filing bankruptcy and valued the home at worth $509,500. It was encumbered by $205,868 in secured debt, leaving equity of $303,632. The trustee objected to their exemption because their equity exceeded the $146,450 cap, available at the time of filing, under 11USC 522 (p). The court found that “Because the debtors are each entitled to ‘apply separately’ the provisions of § 522 under subsection(m), each debtor’s homestead interest is capped at $146,450, meaning their total exemption is capped at $292,900.” Because the trustee had the burden of proof and there was nothing in the record to help the judge determine how much (if any) of the remaining $10,732 equity was acquired with the proceeds of the debtors’ former homestead as allowed by §522(p)(2)(B) the court overruled the trustees objection to the exemption. The full opinion can be found at: http://www.ksb.uscourts.gov/images/ksb_opinions/REN_12-10357-54.pdf

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STATUTE OF THE MONTH

Copyright David Carter
Used with permission.
Statues 11 USC§ 522(p) The homestead
exemption limit in bankruptcy may be different from the Kansas
exemption of 60-2301.
(1) Except as provided in paragraph (2) of this subsection and sections 544 and 548, as a result of electing under subsection (b)(3)(A) to exempt property under State or local law, 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 $155,675 in value in—
(A) real or personal property that the debtor or a dependent of the debtor uses as a residence;
(B) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence;
(C) a burial plot for the debtor or a dependent of the debtor; or
(D) real or personal property that the debtor or dependent of the debtor claims as a homestead.
(2)(A) The limitation under paragraph (1) shall not apply to an exemption claimed under subsection (b)(3)(A) by a family farmer for the principal residence of such farmer.
(B) For purposes of paragraph (1), any amount of such interest does not include any interest transferred from a debtor’s previous principal residence (which was acquired prior to the beginning of such 1215-day period) into the debtor’s current principal residence, if the debtor’s previous and current residences are located in the same State.
OUR TAKE ON THIS:
When filing bankruptcy if a homestead is obtained within 1215 days the exemption law of Kansas no longer applies and the debtor is no longer allowed the unlimited exemption but must comply with section 522(p). On April 1, 2013 the amount allowed as an exemption was adjusted to $155,675. The amount is adjusted every 3 years pursuant to 11 USC § 104. Per Judge Nugent this exemption can be stacked by a couple.
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Serving Kansas since 1984, The Law Offices of Donald C. Astle practices exclusively in consumer bankrupcy and collection law. No other cases are accepted.

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Donald C. Astle
Washburn University, 1984
Sheila C. Maksimowicz
University of Kansas, 1980