Jefferies v. Carlson (In re Jefferies)
- Citation:
- 2012 WL 1497904 (9th Cir.BAP (Wash.))
- Tag(s):
-
- Ruling:
- The Bankruptcy Appellate Panel for the Ninth Circuit Court of Appeals affirmed the decision of the Bankruptcy Court, sustaining the Chapter 7 Trustee’s objection to the Debtor’s exemption of homestead, finding that the exemption did not apply to the sale of the Debtor’s former primary residence, when the sale was not entirely voluntary and pursuant to a divorce decree.
- Procedural context:
- Appeal from the United States Bankruptcy Court for the Western District of Washington’s decision determining that the Chapter 7 Debtor could not claim a homestead exemption for an amount awarded to him as an “equalizing judgment” in a divorce decree and relating to the sale of the parties’ marital residence, under Washington Revised Code (RCW) 6.13.070(1), reviewed de novo. Motion for Reconsideration reviewed for abuse of discretion
- Facts:
- The Debtor filed a Chapter 7 bankruptcy in March, 2011. He moved out of his former marital residence on April, 2009, and was divorced in December, 2010. He was awarded an “Equalizing Judgment” in the amount of $40,800 in the divorce decree and was directed to transfer title to his ex-wife in the divorce. In February, 2011, the Debtor conveyed his interest in the property to his ex-wife.
The Debtor exempted $47,000 as “proceeds from sale of homestead” on Schedule C of his bankruptcy petition. The trustee objected to the exemption.
A hearing took place on July 5, 2011. The Bankruptcy Court concluded that the proceeds did not qualify for the exemption and sustained the trustee’s objection because under Washington law, the sale had to be voluntary. The Bankruptcy Court found that because the sale was at least due in part to the divorce decree, it was not entirely voluntary. Therefore, the homestead exemption did not apply. The Debtor filed a motion for reconsideration, alleging that the transfer of the residence was voluntary. The Bankruptcy Court denied the motion for reconsideration. The Bankruptcy Appellate Panel affirmed on all matters.
- Judge(s):
- Honorable Eileen W. Hollowell, Honorable Ralph B. Kirscher, and Honorable Meredith A. Jury
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