Misty Brady v. Maxus Healthcare Partners, et al

Case Type:
Consumer
Case Status:
Affirmed
Citation:
19-10974 (5th Circuit, Mar 05,2020) Not Published
Tag(s):
Ruling:
The expiration of the 30-day limitations period to object to a debtor's declaration of exemptions in a Chapter 13 is not binding if the case is later converted to a Chapter 7. Bankruptcy Code § 522(l) does not specify a deadline for when objections must be made. Bankruptcy Rule 1019(2)(B), by providing that the 30-day time limit for objecting to a debtor's declaration of exemptions is reset upon conversion of the case to Chapter 7, is consistent with the concept that the limitations period is not jurisdictional.
Procedural context:
The debtor filed a Chapter 13 bankruptcy case and listed her interests in several closely-held entities as exempt property. No objections were filed. Nearly two years later, after the debtor's case had converted to a Chapter 7 bankruptcy case, the Chapter 7 trustee and another party in interest objected to the debtor's declaration of exemptions. The bankruptcy court and district court affirmed the objection.
Facts:
The debtor filed a Chapter 13 bankruptcy case and listed her interests in several closely-held entities as exempt property. No objections were filed. Nearly two years later, after the debtor's case had converted to a Chapter 7 bankruptcy case, the Chapter 7 trustee and another party in interest objected to the debtor's declaration of exemptions. The debtor argued that the bankruptcy court could not undo the exemptions because the statute of limitations established by Fed. R. Bankr. P. 4003 had already expired. The Chapter 7 Trustee argued that the statute of limitations was reset by Fed. R. Bankr. P. 1019(2)(B) by the conversion of the case to a Chapter 7 proceeding, and that 11 U.S.C. § 522 does not establish a statute of limitations for objecting to a debtor's declaration of exemptions.
Judge(s):
HIGGINBOTHAM, HO, and ENGELHARDT

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