Exemptions In Bankruptcy

22 Dec Is Money I Give to My Mom for Safekeeping Protected if I File Bankruptcy?

A recent case in the Southern District of New York Bankruptcy Court illustrates the importance of having a knowledgeable bankruptcy attorney, and telling him/her about ALL of your assets. Brian Driskell cashed out his exempt retirement account, and gave $1,800 of it to his mother to hold for safekeeping. ...

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30 Nov Social Security Benefits Not Exempt If Already Received, Minnesota Court Says

When social security benefits have already been received, but not yet spent on the date a bankruptcy case is filed, the funds cannot be claimed exempt under the federal bankruptcy exemptions, according to In re Carpenter, 2008 WL 4567128 (Bky.D.Minn. Oct. 14, 2008), a recent Minnesota bankruptcy court ruling. This case held that bankruptcy code section 522(d)(10)(A) only allows the debtor to exempt his or her right to receive social security benefits in the future, and that section 522(d)(10)(A) did not authorize exemption of such benefits, if the funds remained in the debtor's possession on the date of filing. The debtor in Carpenter had filed a chapter 7 case while in possession of about $17,000, which he had received as settlement of a social security claim shortly before filing bankruptcy. He selected the federal bankruptcy exemptions, and claimed the $17,000 exempt pursuant to section 522(d)(10)(A). He also argued that 42 U.S.C. section 407 insulated social security benefits from the reach of any bankruptcy trustee, regardless of whether he selected the federal or state bankruptcy exemptions.
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18 Nov Bankruptcy “Exemption Planning”: In re Addison Makes It Easier

  The U.S. Court of Appeals for the Eighth Circuit ruled in August 2008 that section 522(o) of the bankruptcy code allows pre-bankruptcy "exemption planning" in the manner as was allowed prior to the enactment of section 522(o). This decision, In re Addison, 540 F.3d 805 (8th Cir. 2008), addressed, among other things, the effect of section 522(o), which was added to the bankruptcy code by the 2005 Bankruptcy Reform Act. Section 522(o) directs the bankruptcy court to reduce the amount of a debtor's homestead exemption by the amount of any non-exempt property the debtor has transferred to such homestead (usually by paying down a home mortgage, or purchasing a new homestead), if the transfer was done with the intent hinder, delay or defraud creditors, and if the transfer occurred in the ten years prior to the bankruptcy. Before the Addison ruling, it was feared that bankruptcy courts would rely upon the new section 522(o) to forbid the long-standing practice of exemption planning. Worse, debtors would be denied a discharge under section 727 if section 522(o) was successfully invoked. Addison makes clear that in at least one federal appeals court circuit, homestead exemption planning is alive and well, without fear of the application of either section 522(o) or section 727, except in unusual cases.
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