Amending exemptions
Posted: Mon Aug 09, 2004 11:48 am
Question for the group:
Client had judgment entered against him in 1998 for $120,000 an
abstract of which was recorded. Client filed Ch 7 in 2000. At time
of filing, Client and spouse owned a home worth $185,000 which had
two mortgages totaling $120,000. Client also owned a 1989 Corvette
worth $12,000.
Client claimed 703 exemptions, fully exempted the Corvette and took
only $1,000 exemption on the house. Ch 7 trustee filed no asset
report, client received discharge and case closed. No specific order
re abandonment of property to debtor.
Client now wants to avoid the judgment lien to refi. Home is now
worth $485,000 and Client still has the Corvette.
Under In re Goswami 304 b.r. 386, debtors may now reopen to amend
exemption schedule after case closes. However, by switching from 703
to 704 to claim homestead, Corvetee is not protected. Client fears
Ch 7 Trustee may be appointed to administer Corvette and try to undo
abandonment of the house. Presently, there would be nonexempt equity
of about $95,000 after payment of deeds of trust, abstracted
judgments and Client's homestead.
As Goswami is such a new case, there are no reported decisions on
what happens where exemptions are amended to make an asset available
for liquidation.
Any suggestions on the uncertainty posed by reopening???
The post was migrated from Yahoo.