Tag: exemption

An exemption is the way you protect your assets in a bankruptcy. For example, the California homestead exemption is one example of how debtors can protect their home in a Chapter 7 bankruptcy. In California, there’s also an option to allow you to protect anything you want, but it has limits.

 

 

reset the 1215 days for the homestead

Can a Home Transfer to a Trust in 1215 days Blow the Homestead?

Posted by Hale Andrew Antico on

Transfer but Keeping Equitable Interest, 1215 days, and Homestead

A look whether a refinance or transfer to a LLC, will, or trust restarts the 1,215 days for a homestead exemption in California

The maximum California homestead exemption now protects over $600,000 of home equity. However, there are conditions for a debtor to protect this amount in a bankruptcy. One of these is that the homeowner must have acquired the interest over 1,215 days ago. Does a refinance or transfer to a will, trust, or LLC restart this crucial timer? Let’s take a look.

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unvested stock options subject to liquidation in Chapter 7 bankruptcy

Keeping Stock Options in Bankruptcy Depends on This Key Factor

Posted by Hale Andrew Antico on

Keeping Stock Options in Bankruptcy Depends on This Key Factor

Are Unvested Stock Options subject to a Chapter 7 Bankruptcy liquidation? Ninth Circuit case law clarifies.

Unvested stock options aren’t very common, but if someone gets compensated with contingent stocks, they can be worth a lot of money.  Keeping the unvested stock options in a Chapter 7 bankruptcy liquidation, then, becomes critical.

Stock Options and Property of the Estate

Stocks and the Bankruptcy Code: Section 541

The first place to start is determining whether stocks or stock options are property of the estate.  Looking at 11 USC 541(a)(1), we see that “Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.”

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duplex apartment outhouses and homestead exemption house with knife

Duplex, ADUs, Apartments, Buildings and Calif Homestead Exemption

Posted by Hale Andrew Antico on

Duplex, ADUs, Apartments, Buildings and California Homestead Exemption

Does the California Homestead protect a separate dwelling unit?

Is a duplex or apartment protected by the California homestead exemption? What about a separate building like an ADU on the same lot. Or a very large lot. It depends.

Accessory dwelling units (or ADUs) are becoming quite common in California. The question is whether the Calif homestead is broad enough to cover ADUs.  The California homestead exemption lets someone in a bankruptcy protect some or all of the equity in their residence. What are the limits of this though?

Starting with a common scenario: if someone rents out a room in their home, is the unpartitioned house now subject to limited protection? What if it becomes partitioned?

The issue only gets more complicated from there. Debtors can live in a duplex or apartment building they own, but how extensive (or limited) is the asset protection of the homestead exemption in California?  What about a home on a (very large) lot? Two dwellings or ADUs on a lot?  Let’s take a look.

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California wildcard exemption amount for bankruptcy, showing jokers, which are often wild cards

New California Wildcard Exemption: the Ultimate Guide (2023)

Posted by Hale Andrew Antico on

New California Wildcard Exemption: the Ultimate Guide (2023)

What to know about California Wild Card Exemption and the Current Amount

California wildcard exemption is big for bankruptcy lawyers protecting their clients’ assets. Here’s the ultimate guide on the new updated California wild card exemption amount, and how to figure it.

California Exemptions, generally

In bankruptcy, each state has their own exemptions, or ways they allow debtors to protect some or all of their property. California has opted out of the federal exemptions, and has it’s own passed by our legislature. This is where the California wild card exemption fits in.

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California bankruptcy exemptions can save your house.

New! 2024 California Homestead Exemption Increased by Inflation

Posted by Hale Andrew Antico on

2024 California Homestead Exemption, increased by inflation

Brand new! The maximum 2024 California Homestead Exemption amounts

The 2024 California homestead exemption numbers are already available, and different from last year, and even the original range of $300,000 to $600,000. In fact, in 2024, they top out way higher than $600,000, which helps you save more of your home from creditors than the homestead exemption could in 2023. Why? Because of inflation. The new California homestead exemption is tied to the CPI, or consumer price index.  And everyone knows things lately aren’t cheap.

November 2023 update: The new inflation-adjusted 2024 California homestead exemption is now known. See below what it will be for cases filed after Jan 1, 2024. Don’t worry – the 2023 homestead exemption amount is still here for cases filed before on Dec 31, 2023 or earlier.

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Figuring the Los Angeles Country median home price size is like trying to calculate the median coin weight when all we have is data about stack size

How to Figure the Los Angeles County Median Home Price (2023)

Posted by Hale Andrew Antico on

How to Figure Los Angeles County Median Home Price (2023 & 2024)

The Los Angeles County median home price in 2023 can be tricky to determine. There are different sources that say different things. It’s not clear which of the many options will be relied upon by courts and trustees for the California homestead exemption.  Also, while bankruptcy may seem to be “just forms,” make sure you check out my list of 12 crucial tips to do or avoid before filing bankruptcy.

2023 update: there seems to be a consensus among local bankruptcy attorneys as to what the Los Angeles County median home price is. More than that, this L.A. median price changes each year. While it’s still untested in court, a lot of the initial uncertainty has cleared up.  Read on!

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Amending exemptions or schedules in a reopened case is not allowed in some courts

Amend Exemption in Reopened Bankruptcy? The Three Approaches

Posted by Hale Andrew Antico on

Amend Exemption in Reopened Bankruptcy? The Three Approaches

In a bankruptcy case where you already got the order of discharge and has been closed, can you go back and reopen the case to amend the exemptions to protect an asset? The answer is (say it with me): it depends.

The Scenario: Need to Reopen & and Amend Schedules

If you practice bankruptcy long enough, you know the situation. Debtor files bankruptcy, and somehow forgets that they had a cause of action and (potential) lawsuit against someone, and doesn’t disclose the potential asset.

Years later, defendant finds out about the bankruptcy, considers judicial estoppel, and for good measure, notifies the old bankruptcy trustee about the asset in the closed bankruptcy case.

Debtor then reopens the bankruptcy case, and amends the schedule of assets and exemptions and all is forgiven. No harm, no foul.

Of course, this can also happen when you want to avoid the lien of a home with no equity at the time of an old case, using Section 522(f). This would lead to the need to reopen and amend Schedule C with a de minimis amount to show that the lien is impairing an exemption.  In re Higgins, 201 BR 965 (9th Cir BAP 1996)

The Problem: Can you Amend Exemptions after a Bankruptcy is Closed?

We start with one potential issue:  Rule 1009(a) of the Federal Rules of Bankruptcy Procedures says when a case can be amended. “A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed.”

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double homestead exemption for married couple filing bankruptcy jointly

Can Married Couples Double Stack Homestead Exemptions: Explained

Posted by Hale Andrew Antico on

Can Married Couples Double Stack Homestead Exemptions: Explained

If each spouse gets a homestead exemption in bankruptcy, it could double the amount of equity protected.

If married, can you double or stack a homestead exemption?  A homestead exemption helps protect your residence when you file bankruptcy. But if a married couple files jointly, does each get an exemption? Does the homestead exemption double for each spouse? Maybe. That would allow the debtors to double or stack the homestead exemption and protect more equity.

Courts have struggled with this. On the one hand, the law means what the law says. If the statute says the limit is a number, that’s the number. On the other hand, why should a person not get same the amount as if they were single? Put differently, if the exemption amount is the same if someone single or married, a married person is only getting half the protection.

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A converted bankruptcy case may start the objection deadline

Bankruptcy Conversion and Exemption Objection Deadlines

Posted by Hale Andrew Antico on

Bankruptcy Conversion and Exemption Objection Deadlines

Does a converted bankruptcy case restart the deadline for objections to exemptions?

A recent look at objecting to exemptions and Rule 4003 revealed a circuit split — despite the rule’s text — as to whether a bankruptcy that is filed as Chapter 11 or as Chapter 13 but then converted to Chapter 7 resets the clock for objections to exemptions.

The Issue

The FRBP rule says that the opportunity to object to exemptions is within 30 days of the 341a meeting.  But when a case is filed as a Chapter 11 or Chapter 13, the trustee and creditors are not quite as motivated to challenge exemptions as in Chapter 7, as these chapters are not about liquidation or taking nonexempt assets for the benefit of the creditors. However, when a case is then converted to Chapter 7, a trustee who is focused like a laser beam on exemptions is then appointed. However, the 341(a) meeting was already concluded months (if not years) ago and the new trustee doesn’t get a chance to object to the exemptions.

Some courts have found this to be unfair as a backdoor way around exempting assets or a violation of due process, and the courts have allowed a new deadline. Others have held true to the statute’s plain text. This has led to a split in the circuits.

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Deadline to object extended by amending exemptions or schedules

Objecting to Exemptions: Amendments and the 4003 Deadline

Posted by Hale Andrew Antico on

Objecting to Exemptions: Amendments and the 4003 Deadline

When does the 30-day deadline of Rule 4003 get restarted?

Does any amendment of schedules extend the 30-day objection deadline of Rule 4003, or only amended exemptions or assets? Another bankruptcy attorney recently saw that a creditor objected to his client’s exemptions, which creditors are allowed to do. The issue is, there’s a deadline to object to exemptions, as a rule. Creditor objected after the deadline, and debtor’s counsel asked if he was justified to seek Rule 11 sanctions.

There are exceptions that can extend or restart that objection deadline. Obviously, it would be fair that, for example, amending the exemptions on Schedule C gives an opportunity to object to the amendments and new exemptions. But what if there’s an amendment to any of the schedules?  Does amending income on Schedule I give a new opportunity to object to exemptions? Let’s take a look.

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