Last week the United States Supreme Court granted certiorari in Schwab v. Reilly (08-538), a case from the Third Circuit Court of Appeals. The case will be argued next term and the Supreme Court is limiting its review to the two following questions:
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.”
- Opinion below (3rd Circuit)
- Petition for certiorari
- Brief in opposition
- Petitioner’s reply brief
- Brief amicus curiae for National Association of Bankruptcy Trustees (in support of petitioner)
When the Supreme Court releases its decision, I’ll post an update.
Source: SCOTUS Blog and BankruptcyProf Blog.
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Thanks, Dan, for this post, and I appreciate the links to the lower court’s decision.
Brian Allen