650
Stevens, J., dissenting
Although several Courts of Appeals and Bankruptcy Courts did not go as far as these courts, preferring instead in the case of an untimely objection to examine a claimed exemption to determine if there was a "good-faith statutory basis" for the exemption, they nevertheless eschewed the literal reading of the statute and rule adopted by the Court today. They did so because they believed it was important to strike a proper balance between avoiding the undesirable effect of "exemption by declaration" and yet not permitting a trustee "another bite at the debtor's apple where the debtor has claimed certain property exempt in good faith." In re Peterson, 920 F. 2d 1389, 1393-1394 (CA8 1990); see In re Sherk, 918 F. 2d 1170, 1174 (CA5 1990); In re Dembs, 757 F. 2d 777, 780 (CA6 1985).
Here, the trustee would succeed under either approach.
Whether the court is always permitted to entertain an objection to a claimed exemption (at least until the case is closed) 5 when the claimed exemption is invalid or whether the court can do so only if the claimed exemption lacks a good-faith statutory basis would mean that in this case the court could review the debtor's claimed exemption. Here, the parties acknowledge that the debtor could not claim a statutory basis for her claimed exemption for the full award because neither backpay nor tort recovery is exempt under § 522(d)(5).
III
The practice of these lower courts has been motivated not only by equitable considerations, but also by the requirement set forth in § 522(b). Section 522(l) explicitly provides that "[t]he debtor shall file a list of property that the debtor
good faith of debtors in claiming exemptions, otherwise the whole system would collapse." Tr. of Oral Arg. 13. For example, this trustee alone "had approximately two or three hundred of these cases a year, which . . . is typical of bankruptcy trustees all across the country." Id., at 15.
5 The parties have stipulated that the debtor's case has never been closed. App. 56.
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: October 4, 2007