Valone v. Waage (In re Valone)

14-11457; D.C. Docket No. 2:13-cv-00171-SPC, Bkcy No. 9:12-bkc-02265-FMD
The Eleventh Circuit held that the filing of a Chapter 13 bankruptcy petition by a Florida debtor who owns, or debtors who own, homestead property does not foreclose the availability of Florida's wildcard exemption to that debtor or those debtors. The Court reasoned that Debtors' residence was protected from creditors by the automatic stay, not the homestead exemption, and Debtors are eligible to claim the wildcard exemption in their personal property. Reversed and remanded.
Procedural context:
Appeal from a district court order affirming a bankruptcy court's disallowance of an exemption claimed by the debtors in their Chapter 13 bankruptcy petition.
Debtors owned homestead property in Florida. They filed a joint petition for Chapter 13 bankruptcy relief. They did not claim a homestead exemption. Debtors did claim a wildcard exemption in their personal property under Florida Statute § 222.25(4), which permits a debtor to exempt from legal process "[a] debtor's interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution." The Chapter 13 Trustee objected to the wildcard exemption claim, arguing that Chapter 13 protects debtors' homes and, therefore, debtors who file Chapter 13 receive the benefits of the homestead exemption. The bankruptcy court sustained the objection, concluding that a Chapter 13 filing constituted an impediment to the trustee's administration of the residence. Debtors appealed to the district court. The district court affirmed the bankruptcy court's disallowance of the wildcard exemption. Debtors appealed to the 11th Circuit.
Wilson, Fay, and Ripple, Circuit Judges

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