When I first started practicing bankruptcy law some 20 years ago, one of the lawyers who mentored me regularly reassured me that bankruptcy was a pleasant area of practice because “nothing happens very quickly and you can always amend your pleadings if you change your mind.”
I have generally found this reassurance to be true, although I am sensing that the trend in the law is moving away from an absolute right to change your mind.
A recent case coming out of Florida suggests that debtors may be stuck with their originally claimed exemptions even if they change their mind regarding the surrender of property. In the Guididas case, the debtor filed a Chapter 7 with a stated intention to keep his home. Later, after receiving a discharge but presumably before the case was closed, the debtor changed his mind and decided to surrender his home. At the time of the surrender the debtor modified his exemption schedule and claimed $5,000 of personal property exemption that is available to non-homeowners under the Florida exemption statute. The Chapter 7 trustee objected and the judge sustained the trustee’s objection.
I had exactly the opposite result in a case that I filed in the Northern District of Georgia. In that case, I listed a pending personal injury case when I filed a Chapter 7 case on behalf of a client. During the pendency of the bankruptcy, the personal injury case settled and the trustee called me to request that I amend the exemption schedule to protect part of the settlement.
Both my case and the Guididas case were filed in the 11th Circuit, so there is clearly not a consensus. If I had to guess, however, I would think that the result in Guididas will become the accepted practice.
What this means to you – spend time with your lawyer discussing your exemption schedule and consider the impact if you should change your mind. Lawyers should consider creative solutions like filing for all possible exemptions and later amending to delete those that are inapplicable.