25 Jul Bankruptcy trustee cannot take exempt property to pay domestic support claim.
Shortly after passage of new Code Section 522(c)(1), word spread that trustees could possibly take exempt property to settle domestic support obligations. This section included language that exemptions did not protect property against such debt. Trustees suggested an onslaught against the support obligor in bankruptcy court, ignoring the absence of enabling legislation or authorization to collect fees for such effort.
Judge Mary P. Gorman opined on the issue in In re Vandeventer, Jr. In that case, the Central District of Illinois chapter 7 trustee attempted to administer otherwise exempt property for the benefit of a domestic support obligation creditor. Judge Gorman ruled that changes to the bankruptcy code did not convert exempt property into property of the bankruptcy estate. Likewise, she found no authority for the trustee to administer exempt property in satisfaction of support obligations. This decision follows in line with In re Covington from the Eastern District of California, In re Ruppel from Oregon, and In re Quezada from the Southern District of Florida. There are no reported decisions to the contrary.
Andy Miofsky, Esq.
Latest posts by Andy Miofsky, Esq. (see all)
- Social Security Income: Invisible Money Bankruptcy Cannot Touch. - December 19, 2016
- What can and cannot be included on a credit report? - December 21, 2015
- Use Exemptions to Protect Your Property in Bankruptcy - January 20, 2014
- A profile of the typical person who files bankruptcy - January 13, 2014
- Amended Bankruptcy Rule 1007 changes Form 23 debtor education filing requirement. - January 7, 2014