Soule v. Willcut (In re Willcut)

Citation:
Soule v. Willcut (In re Willcut), BAP Case No. 11-023 (10th Cir. B.A.P. May 29, 2012)
Tag(s):
Ruling:
AFFIRMING the bankruptcy court's order, the 10th Circuit Bankruptcy Appellate Panel held that the phrase "value of an interest in . . . real [ ] property" in Section 522 of the Bankruptcy Code is defined as the measure of the increase in monetary value of the economic interest in real property claimed as a homestead exemption due to a fraudulent transfer of non-exempt funds into the property and that, if there is no equity in the homestead, there is no value subject to reduction under section 522(o).
Procedural context:
Appeal from the bankruptcy court for the Northern District of Oklahoma overruling the trustee's objection to the Debtor's homestead exemption under 11 U.S.C. 522(o)(4).
Facts:
Debtors filed for Chapter 7 and claimed their home as exempt under Oklahoma's homestead exemption, which is unlimited in value. The Trustee objected, claiming that the exemption should be reduced under section 522(o)(4) because the debtors had applied approximately $100,000 received as proceeds from the auction of non-exempt property toward the purchase of the home, an improper and fraudulent conversion of non-exempt assets to exempt assets. The bankruptcy court overruled the Trustee's objection and held in pertinent part that there was no realizable equity in the home due to the mortgage.
Judge(s):
Nugent, Karlin, and Romero, Bankruptcy Judges.

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