| ID |
Name |
Group |
Other |
Code
Sec |
Cross
Ref |
Problem Referenced |
Proposed Solutions |
NBRC-
0004 |
Edgar M.
Rothschild, III |
Rothschild,
Bloom, Hoover,
Allison & Ryan. Chapter 7 & 13 Debtor's counsel. |
Oral Comments:
May 17th Meeting |
|
|
Lack of
uniformity of exemption scheme |
Abolish opt-out
provisions to federal exemption scheme |
NBRC-
0004 |
Edgar M.
Rothschild, III |
Rothschild,
Bloom, Hoover,
Allison & Ryan. Chapter 7 & 13 Debtor's counsel. |
Oral Comments:
May 17th Meeting |
522(d) |
|
Lack of
uniformity of exemption scheme |
Abolish opt-out
provisions to federal exemption scheme |
NBRC-
0012 |
Saul
Eisen |
President;
National Association of Bankruptcy Trustees |
October 12, 1995,
Working Paper |
522(l) |
F.R.B.P.
4003(b) |
Thirty-day time
period within which to object to exemptions is too short. |
Extend the time
period in Bankruptcy Rule 4003(b). |
NBRC-
0012 |
Saul
Eisen |
President;
National Association of Bankruptcy Trustees |
October 12, 1995,
Working Paper |
522(l) |
|
"Exemption by
Declaration" provides
debtors with an unfair windfall. |
Overrule the
Supreme Court decision of Taylor v. Freeland Kronz and eliminate the
effect of a trustee's failure to object to a claim of exemption to which
there is no colorable statutory basis. |
NBRC-
0012 |
Saul
Eisen |
President;
National Association of Bankruptcy Trustees |
March 29, 1995,
Letter |
522 |
|
More and more
assets are slipping through the hands of trustees. The primary culprit
is exemptions, both under state and federal statutes. |
The exemption
scheme should be changed in a manner which would make the application of
exemptions more consistent between the various states and prevent abuse
of the bankruptcy process when a debtor exempts an exorbitant amount of
property. |
NBRC-
0101 |
Ike
Schulman |
President;
National Association of Consumer Bankruptcy Attorneys |
Invited
Participant to numerous NBRC meetings. |
|
|
Since bankruptcy
exemptions are determined on a state-by-state basis, there are
significant differences among the states in amounts of exempt property
allowed. At the same time, the bankruptcy code provides its own
exemption amounts for debtors in those states that have not yet opted
out of the federal exemption scheme. This has resulted in somes states
providing exemption amounts which are less than those provided under the
federal system, leaving debtors in those states with a substantially
diminished fresh start. |
NACBA recommends
that the Bankruptcy Code be amended to allow all debtors to choose
either their own state's exemptions or the federal bankruptcy
exemptions. |
NBRC-
0105 |
Gary
Klein |
Staff Attorney;
National Consumer Law Center, Inc. |
Invited
participants - April Meeting |
522(b)(1) |
|
Nobody foresaw
the degree to which states would seek to impose draconian exemption
limitations which interfere with the congressional policy of allowing a
discharge and accompanying fresh start. Similarly, nobody foresaw the
perception of unfairness which wuld undermine the bankruptcy system
because similarly situated creditors in neighboring states are allowed
to retain wholly different amounts of exempt property. |
The NBRC should
recommend that a floor be set on the opt-out from the federal exemptions
so that states cannot impose limitations which are more restrictive than
those available under section 522(d). The in forma pauperis pilot
program has worked well. It has not had a measured impact on the
financial viability of the bankruptcy system. This pilot program should
be extended to make relief from bankruptcy fees for very poor debtors
available nationwide. |
NBRC-
0109 |
Karen
Gross |
Professor of law;
New York Law School |
|
522(b) |
|
Problem of
inconsitency between federal and various state exemption
schemes. |
Federal rather
than state
exemptions should be employed to create uniformity and
predictability (and
eliminate the appearance of impropriety). This would require, among
other
things, the amendments of 11 U.S.C. § 522(b). |
NBRC-
0116 |
Kenneth J.
Doran |
Law Offices of
Kenneth J. Doran |
Participated at
Consumer Bankruptcy Working Group on July 19. |
|
|
Bankruptcy law
indirectly prohibits debtors from taking advantage of exemption laws and
preference laws. |
The Bankruptcy
"system" should
explicitly permit pre-bankruptcy planning in consumer cases to allow
debtors
to benefit from exemption and preference laws. |
NBRC-
0119 |
William C.
Whitford |
Professor |
|
|
|
Inadequate
exemptions frustrate the consumer bankruptcy policy to provide the
overburdened debtor with a fresh start. |
Establish
mandatory minimum exemptions in bankruptcy, while establishing upper
limits on state exemptions when they are elected. Also, repeal Patterson
v. Shumate, and deal with pension rights as a matter of exemptions
policy. |
NBRC-
0120 |
Judith
Elston |
Chrysler
Financial Services, Toyota Motor Credit Company, Ford Motor Credit
Company, General Motors, and American Financial Services |
|
|
|
Creditors are
deprived of a reasonable opportunity to review and object to the
debtor's scheduled exemptions. |
The Code should
be amended to provide an aggregate ceiling for exemptions even for those
who elect a state exemption. The Code should provide an incentive for
counsel to accurately plead debtors' exemptions. |
NBRC-
0124 |
Wayne
Johnson |
Attorney;
Brobeck, Phleger & Harrison,
LLP |
|
522 |
|
As a result of
Taylor
v. Freeland & Kronz, a debtor essentially has the ability to
exempt any property he or she desires under section 522(1) unless a
timely objection is filed to the claim of exemption. The effect of
Taylor is magnified by the extraordinary short time frame for objecting
to claims. Under Rule 4003, interested parties have thirty days after
the conclusion of the meeting of creditors... to object to exemptions.
While this rule probably gives creditors a sufficient period of time to
consider exemptions, trustees are being hard-pressedunder this deadline.
In most cases a trustee does not have a working knowledge of the assets
until the end of the 341 meeting. At that point if assets are sufficient
to administer the estate, the trustee hires counsel and that process
takes time. Thus, once an attorney is hired, she must file an objection
to the exemptions immediately or file a motion to extend the time to
object, as the court must act on any extension motion "within
the thirty days." |
The proposed
revision would be to modify Rule 4003(b) so that the period to object to
exemptions can be extended so long as a motion requesting such extension
is filed within such thirty-day period. Such a modification would
conform Rule 4003(b) to other rules such as Rules 4004(b) and 4007(c)
governing time to object to a discharge. It is not necessary for the
court to actually rule prior to the deadline. |
NBRC-
0121 |
Brian L.
McDonnell |
Navy Federal
Credit Union |
|
522 |
|
Exemptions are
not uniform. |
Revise § 522
to provide
a framework for greater uniformity of exemptions among the
bankruptcy courts. |
NBRC-
0123 |
Henry J.
Sommer |
National
Bankruptcy Conference |
Submitted report
entitled "Reforming
the Bankruptcy Code" |
522(b) |
|
Federal
bankruptcy exemptions are not available in all states. |
The language in
§ 522(b)
permitting a state to make the federal bankruptcy exemptions
unavailable
to its resident should be repealed. |
NBRC-
0123 |
Henry J.
Sommer |
National
Bankruptcy Conference |
Submitted report
entitled "Reforming
the Bankruptcy Code" |
522(b)(2) |
|
The law regarding
exemption of entirities property in bankruptcy is confused and variable
amount circuits and districts. |
Amend §
522(b)(2)
to resolve the confusion over exemption of entirities property in a
way that
does not cause the liquidation of all entirities property in the
bankruptcy
case and protects a modest amount of entirities property as
exempt. |
NBRC-
0123 |
Henry J.
Sommer |
National
Bankruptcy Conference |
Submitted report
entitled "Reforming
the Bankruptcy Code" |
522 |
|
The law regarding
whether, and to what extent, consumer debtors may convert nonexempt
property to exempt property prepetition is confusing and
unpredictable. |
Clarify that the
conversion of nonexempt to exempt property should be grounds to bar a
discharge. |
NBRC-
0152 |
Kenneth L.
Robinson |
President;
National Ass'n of Federal Credit Unions |
|
|
|
Problem of
disparate application of the Code has led to no unifomrity in the Code,
particularly in the area of exemptions. |
Code should be
amended to establish uniform federal limit on personal exemptions which
will help establish equality for debtors filing in different
jurisdictions. |
NBRC-
0175 |
Kenneth P.
Childs, on behalf of the Bankruptcy Review Committee of the Oregon State
Bar Debtor-Creditor Section |
Attorney |
|
522 |
F.R.B.P.
4003(b) |
Thirty day time
period under Rule 4003(b) during which objections to a debtor's claimed
exemptions can be made is too short, unnecessarily restrictive, and
sometimes results in debtors being entitled to unwarranted
exemptions. |
Time period for
objecting to a debtor's claimed exemptions should be extended, possibly
to 60 days from the first meeting of creditors, in order to coincide
with the deadline under Rule 4004 for objecting to the debtor's
discharge in Chapter 7 cases. |
NBRC-
0193 |
James V. Stanton
and Richard A. Steyer, on behalf of Natl. Assoc. of Bankruptcy
Trustees |
Attorneys and
bankruptcy trustees |
Statement by Saul
Eisen, NABT's president |
|
|
In the attached
statement,
the president of the National Association of Bankruptcy Trustees
("NABT") states that the period within which the trustee must object to
exemptions is too short. Also, in cases where the trustee "fails to
object to exemptions to which there is no statutory basis," the
Code should be amended to eliminate the effects of that failure to
object. |
Period within
which the trustee must object to exemptions should be
extended. |
NBRC-
0212 |
William H. Brown
and Lawrence Ponoroff |
Bankruptcy Judge
(W.D. Tenn.) and Tulane Law School Professor of Law,
respectively |
|
522(b) |
|
"Opt-out" and
"election" provisions in § 522(b)
should be eliminated because the present approach to exemption
policy has
introduced an enormous level of uncertainty into the consumer
bankruptcy
system which has eroded public confidence, increased administrative
costs,
and in many cases, undermined the ability of the system to afford
effective
relief to debtors and creditors alike. This postition is based on
the recognition
that the fresh start in bankruptcy is a matter of federal, not
state, concern. |
"Opt-out" and
"election" arrangements in § 522(b)
should be eliminated in favor of a single list of mandatory, uniform
bankruptcy
exemptions such as: homestead, tangible personal property, unused
homestead,
certain personalty, and income exemptions. The authors include an
in-depth
discussion of these issues and the guiding principles that
influenced their
recommendations. |
NBRC-
0214 |
A. Jay
Cristol |
Chief Bankruptcy
Judge, S.D. Fla. |
|
522(b) |
F.R.B.P.
4003(b) |
Debtors should
not be
able convert non-exempt property to exempt property by using a
loophole in §§ 522(b) and (1). The author attaches an
article/memorandum he and his law clerk wrote entitled "Bankruptcy
Alchemy: Conversion of Nothing to Golden Opportunity," addressing
bankruptcy exemptions and the repercussions of the Supreme Court's
decision in Taylor v. Freeland & Koonz, 503 U.S. 638, 112 S.Ct. 1644
(1992). The author states that the Supreme Court in this case
unnecessarily broadened debtors' exemption opportunities so that
"debtors may load up non-exempt property and with a little cosmetic
scheduling, drive it across the line into the wonderful world of
exemptions. And even better, of the effort fails, there is no penalty."
The case involved the consequences flowing from the trustee's failure to
object to a claimed bad faith exemption under § 522(1) and Rule
4003(b). The Court held that absent a request for an extension of time,
Rule 4003(b) places a 30-day limit upon the trustee and creditors to
object to the claimed exemptions of a debtor in bankruptcy. Moreover,
Rule 4003(b) must be read in conjunction with § 522(1), which
provides that the property claimed as exempt shall be exempt unless an
objection to said exemption has been timely filed, whether or not the
exemption was claimed in good faith. Consequently, where a bad faith
challenge is not allowed simply because it was not timely filed, "a
debtor may claim anything of value as exempt whether there is a
solid legal
basis, a marginal legal basis, or no legal basis
whatsoever." |
Code should be
amended
to close the loophole provided in §§ 522(b) and (1) which
allows
exemptions claimed in bad faith to remain unchallenged if the
exemption is
not challenged within the 30-day time limit provided in Rule
4003(b). |
NBRC-
0223 |
Frank R.
Kennedy |
Professor,
Michigan Law School; former Executive Director, Commission on the
Bankruptcy Laws of the United States (1973) |
Cover letter
discussing various areas of concern |
|
|
Author provides a
list
of 30 "Topics for Consideration by Commission on Bankruptcy Laws."
The recommended
topic relating to exemptions is: Federalization of
exemptions |
None. |
NBRC-
0299 |
Robert R.
Weed |
Attorney |
|
|
|
Author supports
the concept of uniform federal exemptions with a floor and ceiling on
the homestead. He is concerned that the floor on the homestead is so
high that it will feul the credit card industry's demands for a
mandatory chapter 13. |
Supports concept
of uniform federal homestead exemptions, which would provide much more
uniformity than the present system. |
NBRC-
0302 |
Brian L. Mc
Donnell |
President, Navy
Federal Credit Union |
|
522 |
|
Bankruptcy is
increasingly
being perceived as an "easy way out" for debtors seeking to avoid
responsibility
for their actions. In addition, many people no longer consider
bankruptcy
to be a financial stigma. Bankruptcy filings represent significant
time and
money burdens for creditors and the courts, the costs of which are
often
passed on to customers of the creditors in the form of higher
prices. It
is imperative that bankruptcy procedures be revised to discourage
financial
irresponsibility in today's highly leveraged personal economic
environment.
To reduce the administrative burden of bankruptcy proceedings, fair
and equitable
guidelines should be established. |
In the interest
of establishing
fair and equitable guidelines, § 522 should be revised to
provide a
framework for greater uniformity of exemptions among various
bankruptcy court
jurisdictions. |
NBRC-
0303 |
Commercial Law
League of America |
Commercial Law
League of America (CLLA) |
|
|
|
The Commerical
Law League of America believes that the following issues should be
considered by the NBRC: Should property exemptions in bankruptcy be
uniform in all fifty states If not, should the federal exemptions
provide a ceiling on the state exemptions Is retail or wholesale
valuation more appropriate for determining a creditor's allowed secured
claim for property that a debtor wants to keep in a chapter
13 |
The CLLA believes
that
these issue should receive top priority (no additional details are
provided).
The CLLA believes that use of the terms "retail" and "wholesale"
when describing valuation is confusing, and that it would probably be
better to use "market" and "liquidation" respectively. |
NBRC-
0320 |
Robert M. Zinman,
on behalf of the Bankruptcy Institute |
American
Bankruptcy Institute
("ABI") |
Numerous position
papers, memoranda and research material |
|
|
"If we have
uniform laws
of banktupcy in all 50 states, it would appear to be equitable to
have uniform
federal exemptions in al 50 states." |
Supports
uniformity of property exemptions among the states. |
NBRC-
0324 |
Richard H.
Walker |
General Counsel,
U.S. Securities and Exchange Commission |
|
522(b)(2)(A) |
|
In this
submission representing
the preliminary views from SEC staff, the author states that: (1)
the SEC
has a strong interest in ensuring that the bankruptcy courts are not
used
as a "haven for wrongdoers" in subversion of congressional intent;
(2) scare enforcement resources should not be diverted into unnecessary
or duplicative litigation in bankruptcy court; and (3) the SEC also has
an interest pursuant to § 1109(a)
as a party-in-interest, in protecting the interest of public
investors who
hold securities in companies involved in the bankruptcy system,
ensuring
adequate disclosure of reorganization plans that provide for the
issuance
of unregistered securities, and preventing the misuse of the
Bankruptcy Code's
exemption from Securities Act Registration. |
In furtherance of
these interests, the author proposes that the Bankruptcy Code be amended
to establish a ceiling for the homestead exemption in order to eradicate
the enormous disparities in between different states' allowed
exemptions. |
NBRC-
0338 |
Lisa Hill
Fenning |
Bankruptcy Judge,
Los Angeles, CA |
|
|
|
Some
standardization of federal bankruptcy exemptions is desirable. The
Working Group proposal seems to be a reasonable approach, but the
following concerns should be kept in mind: (1) Some wage-earner debtors
have extremely large retirement funds that would qualify for exemption;
(2) Unless abusive filings by creditors seeking to limit exemptions
become a significant problem, there is no reason to return to holding
trials on acts of bankruptcy for every contested involuntary
petition. |
With these
concerns in
mind, the author recommends (1) that the NBRC consider a cap or
upper limit
on the retirement fund exemption; and (2) a wait-and-see period
before acts
of bankruptcy are written back into the Code, or consider amending
§ 109(I) to make the filing an involuntary solely or primarily to
limit debtor's exemptions grounds for a "bad faith" finding,
justifying imposition of sanctions. |
NBRC-
0341 |
George J.
Wallace |
Attorney, on
behalf of
the American Financial Services Association ("AFSA") |
|
|
|
The bankruptcy
Code's exemption provisions are neither uniform in application from one
state to another, nor fundamentally fair to creditors. Debtors often
change state of residence a few months before seeking bankruptcy relief
so as to secure favorable exemptions (a Wall Street Journal describing
such a case is attached). |
The NBRC should
address
the nearly complete breakdown in bankruptcy policy with respect to
exemptions.
Exemptions in states which "opt out" should be subjected to both a
floor
and a ceiling which are based on cost of living in each
state. |
NBRC-
0353 |
Undersigned
Bankruptcy Attorneys, Eastern District of Missouri |
Fourteen
Bankruptcy Attorneys |
|
|
|
The signatory
attorneys "have
review Judge William H. Brown and Professor Lawrence Ponoroff's
Memorandum,
dated January 3, 1997, outlining their revisions to federal
bankruptcy law
to create a single, national exemption scheme." |
Support the
proposed revisions to federal bankruptcy law to create a single,
national exemption scheme, and encourage the Commission to adopt the
proosal in its entirety. |
NBRC-
0377 |
Lawrence
Ponoroff |
Professor, Tulane
Law School; presenting a paper by Mr. Ponoroff and Judge William Houston
Brown |
|
|
|
The author
attaches a paper he co-wrote on exemption limitations. In this paper,
the authors state that a uniform system of exemptions is preferable to a
floor and ceiling system because exemption policy should be based on
national policy concerns, and not regional economic needs. A uniform
system would also be the only sensible response to the increasing chaos
and inconsistency in exemption case law. |
Bankruptcy Code
should be amended to provide a uniform system of exemptions rather than
a floor and ceiling approach. |
NBRC-
0384 |
American
Bankruptcy Institute |
American
Bankruptcy Institute
("ABI") |
|
|
|
ABI presents this
"Report on the State of the American Bankruptcy System," which
is the capstone of ABI's three-year Bankruptcy Reform Study Project.
The
Project's efforts culminated with a 65-question survey covering a
broad spectrum
of possible areas of reform. The study indicates that: (1) in
general, the
Code of 1978 is working well; and (2) probelms of delay, excessive
costs,
unfairness, and abuse need to be addressed in the current round of
reforms. |
ABI recommnds:
(1) strict deadlines for dismissal or appointment of trustees to help
combat abuse; (2) reorganization of chapter 11 policy to provide
stricter time limits, elimination of non-viable debtors, and reduction
of excessive professional fees; (3) relaxing eligibility requirements
for consumer reorganizations under chapter 13, and providing time
limits, limited discharge and uniform national exemptions; (4) high
standards of integrity for all professionals; (5) a balance between
creditors' and debtors' rights, and equality of distribution; and (6)
not adopting priority classes of claimants. |
NBRC-
0409 |
Mrs. William H.
Behan |
Debtor |
|
|
|
The author was
forced to declare bankruptcy when the court awarded her tenants $55,000
in rent overcharges and $26,000 in attorneys fees based on the author's
violation of rent control provisions. Her home is now being put up for
public auction as part of the bankruptcy process. She feels that
peoples' homes should be protected from bankruptcy proceedings such as
these. |
Code should be
amended to provide a homestead exemption in states where it is currently
not available. |
NBRC-
0459 |
Jerome S.
Lamet |
Attorney |
|
|
|
Need for a
uniform federal bankruptcy exemption policy. |
Author supports
Professor Lawrence Ponoroff's suggestions in his memo of January 3,
1997. Author would add that the tangible personal property single lump
sum cash allowance should be at least $20,000 rather than the $15,000
the Professor suggests to give individuals a fresh start. |
NBRC-
0472 |
List of 14
signatures |
Consumer
Bankruptcy Attorneys in the Eastern District of Missouri |
|
|
|
Need for a
single, national exemption scheme. |
"We have reviewed
Judge
William H. Brown and Professor Lawrence Ponoroff's Memorandum, dated
January
3, 1997, outlining theri revisions to federal bankruptcy law to
create a
single, national exemption scheme. We encourage the Commission to
adopt the
proposal in its entirety. |
NBRC-
0483 |
Robert R.
Weed |
Attorney |
|
|
|
Author is
concerned "that
the floor on the homestead is so high that -- coupled with the
$25,00 all
other exemption and the one-half homestead for renters--that this
will fuel
on the fire of the demand of the credit card industry for a
mandatory Chapter
13." |
Author agrees
with the concept of uniform Federal exemptions with a floor and ceiling
on the homestead, but would trade lower exemptions, if necessary, to get
the Basic Bankruptcy concept of the reporter, Prof. Warren. |
NBRC-
0485 |
Lisa Hill
Fenning |
United States
Bankruptcy Judge, |
|
|
|
Author agrees
that some standardization of federal bankruptcy exemptions is
desireable, but has two areas of concern: 1) Retirement funds - doctors
and lawyers sometimes exit from bakruptcy with $500,000 or more on
deposit, while creditors receive nothing. 2) Revival of acts of
bankruptcy - unless abusive filings by creditors seeking to limit
exemptions become a significant problem, author sees no reason to return
to holding trials on acts of bankruptcy for every contested involuntary
petition. |
The Commission
should
specifically addresss the fact pattern of retirement funds given
above in
its recommendations. Perhaps a "needs" cap or upper limit would be
appropriate. Author would urge a wait-and-see period before acts of
bankruptcy are written back into the Code. A more direct preventative
measure might be to amend §109 (I) to make the filing and
involuntary solely or primarily to limit debtor's exemptions grounds for
a "bad faith" finding,
justifying imposition of sanctions. |
NBRC-
0487 |
George J.
Wallace |
Attorney |
Statement of
American Financial Services Association Concerning Reaffirmations in
Chapter 7 Bankruptcy and Exemptions; Article from Wall Street Journal,
11/8/96, Some Folks Hide Cash in Darnedest Places. |
|
|
Author encloses a
Statement
fromt he American Financial Services Association which asserts that
"As is
widely recognized, the exemption provisions of the Bankruptcy Code
are neither
uniform in application from one state to another, nor fundamentally
fair
to creditors." |
"The Commission
should directly address the nearly complete breakdown in bankruptcy
policy with respect to exemptions. Exemptions in states which "opt out"
should
be subjected to both a floor and a ceiling." |
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
|
10 |
Author is
responding to
the 2/12/97 Exemption Memorandum. With regard to uniformity, author
questions
whether this is possible or even good. "In all fairness, I think we
must also rememeber tht there is something to be said for the concept of
taing your debtor as you find them." "We
also have to remember there are great differences between the States
in living
costs and living conditions which to some extent account for the
changes
or variations in exemption laws across the country." |
If the goal of
exemptions is to help provide the fresh start and keep people off
welfare, regional differences must be taken into account. |
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
10 |
|
Author is
responding to
2/12/97/ Exemption Memorandum. Author feels that certain underlying
premises
are inaccurate, i.e. that Federal Bankruptcy Law must also determine
what
property shall be available for distribution to creditors and what
may be
retained. "Unfortunately, that is never going to be true so long as
we are dealing with state property laws which are not uniform." There
is an underlying assumption that debtors want uniformity, which
author does
not feel is the case. |
|
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
10 |
|
Author is
responding to the 2/12/97 Exemptions Memorandum. Author feels not enough
has been done to accomodate differences caused by state
laws. |
"I think you need
to make
sure that you have some built-in floater or increase in these things
to take
into account inflation. |
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
|
10 |
"I'm not sure it
is appropriate
to apply the same exemptions to single persons as sto married
persons in
terms of ensuring a fresh start and keeping people off the Welfare
roles." |
|
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
|
10 |
Author is
responding to the 2/12/97 Exemption Memorandum. No mention is made of
life insurance benefits either owned by the debtor or in which the
debtor is the beneficiary. |
"I can't imagine
that
you want to treat this as future income (since it isn't) and its use
and
purpose may be very different." |
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
|
10 |
"I'm not sure of
the purpose
for the exemption for persons who do not own a home. What is the
point of
it If the object is to provide them a place to live, how does this
accomplish
that Will it apply to cash If it doesn't apply to cash that can be
used as
rental or something of that sort, it would seem to me to defeat the
purpose." |
"I think there
would be
a large hue and outcry with the retention of large sums of cash
option out." |
NBRC-
0505 |
Jennie Deden
Behles |
Attorney |
|
10 |
|
"As to the
proposal on
involuntary petitions, this is a gigantic leap
backwards." |
|
NBRC-
0519 |
Gerald R.
Miller |
Attorney and
Chapter 7 Trustee |
|
|
10 |
Author is
concerned that homestead exemption may be too low in some areas of
country, which may lead to mortgaging the non-exempt portion. Further,
author is opposed to $25,000 cash gift to each debtor, unless it is
limited to household goods reasonably necessary to maintain the
household. Finally, the proposal does not discuss specific categories of
goods which author feels should be considered. |
"I strongly
oppose the
proposed exemptions amendments, as they are not realistic proposals
in the
real world." |
NBRC-
0529 |
H.F.
White |
Bankruptcy Judge,
Northern District of Ohio |
|
|
|
Author is of the
opinion
that "it is essential that we have on national exemption that is
applicable
to the debtor regardless of where he files in the United
States." |
There should be a
uniform, national exemption statute and more liberal monetary provisions
for exemptions. |
NBRC-
0530 |
Samuel L.
Bufford |
Bankruptcy Judge,
Central District of California |
|
|
|
The adoption of
uniform exemptions in bankruptcy law has been a political problem
historically. Three quarters of the states have opted out of the federal
exemptions in the Bankruptcy Reform Act of 1978. |
"Notwithstanding
the political
problems, I agree that the bankruptcy system would be better off
with a uniform
set of exemptions." |
NBRC-
0533 |
Geoffrey R.
Louis |
President, West
Point Federal Credit Union |
Two examples of
recent cases author was involved in. |
|
|
Author is angry
that exemption levels are so high and houses and retirement income are
exempt, and feels that it is unfair for debtors to hold high equity in a
house or have a high retirement income and not be required to repay part
of the debt out of these monies. |
Retirement
income, social security and other future income, including payments from
claim settlements, should not be exempt. The proposed exemptions should
be less generous, for example the exemption a debtor's
house. |
NBRC-
0536 |
Lee C.
Butke |
President/CEO,
DAYAIR Credit Union |
Copy of letter
dated 2/18/97 from Stephen D. Miles to Lee Butke RE: Bankruptcy Filings,
with enclosures. |
|
|
"...[I]n the
Dayton District
of Southwestern Ohio the handling of Chapter 13 cases is grossly
different
thant the handling of similar cases in Cincinnati and
Columbus...Why, if
there is one Federal Law, are the local districts permitted such
wide latitude
in interpreting and implementing the Law[]" |
"Day Air Credit
Union
supports The Working Group draft on exemptions as presented...The
National
Bankruptcy Review Commission must also set forth standardized rules
in each
State and District as there are gross discrepancies found from
District to
District." |
NBRC-
0539 |
Wayne E.
Johnson |
Attorney |
|
|
|
Author believes
proposed
uniform set of federal bankruptcy exemptions "is quite sound and is
long overdue"; however, author is concerned that the floating exemption
in the amount of $25,000 which can be applied to any property owned by a
debtor (known as a "wild card" exemption)
is too narrow. First, he feels it is inequitable to limit a
non-homeowner
to 1/2 the value of the homeowner exemption. Second, he is concerned
about
homeowners who have no equity in their homes. They would receive no
benefit
from the proposed change, and should if the goal of federal law is
to promote
home ownership. |
1. The wildcard
exemption should be increased to the full amount of the homestead
exemption. 2. Delete the language in the proposal which makes the
increased wild card exemption available only to debtors who are not home
owners. |
NBRC-
0554 |
Karen S.
Williams |
Senior Counsel,
NationsBank |
|
|
|
Author was
"astonished" to find that three weeks after an initial draft of the
Exemptions Proposal by the working group was distributed as subject to
significant modification, it was stated that the proposal "already has
been tentatively approved by the full Commission." Author
also feels that the proposed federal exemptions are too high, and
sigificantly
higher than the states now allow. |
The Commission
should announce specific deadlines for comments. |
NBRC-
0560 |
Jeff
Girmus |
Accounts Control
Manager, Kitsap Federal Credit Union |
|
|
|
"While I agree
with most
to [sic] the recommendations that are being made by the commission,
I do
take exception to the amount exemptions [sic] that are being
recommended
for homestead and for other property....The exemptions you are
proposing
actually give the member a head start instead of a fresh
start." |
"I implore you to
re-evaluate
the exemptions you are proposing and to set much more moderate floor
and
ceilings for homestead and personal property
exemptions." |
NBRC-
0561 |
Ernest William
Ball |
Staff Attorney,
Redstone Federal Credit Union |
|
|
11 |
Author is
responding to letter with questions on exemptions from Melissa
Jacoby. |
|
NBRC-
0563 |
Robert H.
Waldschmidt |
Attorney |
|
|
|
Author writes on
behalf
of NABT Board of Directors to express concern over the "floor"
containted
in the exemption proposal ($40,000 for real property and $25,000.00
for personal
property). NABT is conducting a survey of its membership, and author
feels
that the results will show that this proposal will result in a
drastic reduction
in the number of asset cases in Chapter 7. |
The Review
Commission should consider the adverse consequences of a uniform minimum
exemption standard and re-work the proposal to allow for maximym
exemptions only. |
NBRC-
0566 |
James A.
Pusateri |
Chief Bankruptcy
Judge, District of Kansas |
|
|
10 |
Author is
concerned that
in states such as Kansas, where the Bankruptcy Judges do not allow
creditors
to get any property in bankruptcy proceedings which is exempt under
state
law, and where the state law is more generous in its exemptions then
the
proposed uniform federal exemptions, creditors could force a debtor
into
involuntary bankruptcy in order to reach assets they now cannot. "It
would
be one thing to apply federal exemptions to a debtor who has
voluntarily
chosen to file for bankruptcy, knowing only those exemptions would
be available,
but it would be quite another to forcibly deprive a debtor of
exemption protections
available under state law." |
No specific
proposal. |
NBRC-
0567 |
JOhn D.
Leahy |
CEO, Cinfed
Employees Federal Credit Union |
|
|
|
Author feels that
many debtors abuse Chapter 7 and 13, and that this will increase if
proposed increases in the exemptions are adopted. |
Do not adopt the
new homestead exemption. Take each states's economic profile into
account when setting exemptions. Retirement plans whould not be entirely
exempt. Future income should not be exempt. |
NBRC-
0568 |
Kenneth E.
Salomon |
Concerned
Citizen; President, Salomon Enterprises, Inc. |
|
11 |
|
The Homestead
property exemption is extremely low. |
Author feels the
retirement plan exemption is long overdue, and is infavor of the future
income and medical devices exemptions. He feels the homestead exemption
amount should be raised. |
NBRC-
0570 |
Darren T.
Crossett |
Vice President,
Beacon Federal Credit Union |
|
|
|
While applauding
the notion of exclusive federal bankruptcy exemptions, author feels that
the amounts are too high. |
Lower the amounts
of the proposed homestead and property exemptions. |
NBRC-
0571 |
Kenneth T.
Boylan |
Manager, Queens
Postal Federal Credit Union |
A second letter
from same author on same date. |
|
|
Bankruptcy laws
are too easy on the debtor. |
Federal
exemptions should
apply in all states and chapter 13 should prevail in most cases.
There shold
be no exemption of retirement funds. Secured debts should not be
exempted. "A simple sentence stating "No
debts incurred within the past year will be exempt from discharge,
except
if there is loss of income or excessive medical expense. this [sic]
would
eliminate 50% of bankruptcies." |
NBRC-
0572 |
Don R.
Athearn |
President,
SunState Federal Credit Union |
A second letter
of same
date from same author on Proposed Changes to Chapters 7 & 13 of
the U.S.
Bankruptcy Code. |
|
11 |
Author gives his
views on Proposed Changes on Federal Exemptions |
Author likes
uniform set
of exemptions with floor and ceiling amounts. Medical and health
aids should
be exempt. Payments for bodily injury should not be exempt.
Twenty-five thousand
dollars for property not specifically exempt is too generous -
examine a
percentile for property instead of a flat amount. Author favors a
heightened
standard for filing involuntary petitions, but feels they must be
clearer.
More frequent adjustments for inflation should be made. "It should
be mandatory
that all creditors are provided with financial schedules of debtor
upon completion
without cost to the creditor." |
NBRC-
0573 |
Celia
Woodham |
Director of
Compliance, Chartway Federal Credit Union |
|
|
|
Author is
concerned that bankruptcy is too easy for debtors. |
Adopt federal
exemptions,
but allow states to "opt out" if their exemptions are more
restrictive. Medical
devices, health aids, and retirement benefits should be exempt,
unless the
latter is being used to protect assets. The $25,000 exemption for
Other Property
is reasonable. The floor of $40,000 for the homestead exemption is
too high.
The period for inflation adjustment should be 5 years, rather then
3. |
NBRC-
0577 |
Judge William
Houston Brown |
Judge |
|
|
|
Author is in
favor of uniformity in bankruptcy exemptions. Author accepts the floor
and ceiling approach for the homestead exemption, provided the range
between the two remains narrow. Some thought must be given to how to
restrict homestead exemptions to one per household, i.e. if one spouse
files bankruptcy and the other files at a later time in another
state. |
The floor and
ceiling on homestead exemptions should remain $40,000 - $100,000. The
future income exemption should be exteded not only to future payments
but to funds on hand that can be traced to previous protected income.
Any unused portion of the homestead exemption should be available to the
homeowner as well as the nonhomeowner. In conversion from one chapter to
another, the case trustee, creditors, and other parties in interest
should have a second opportunity to object to the debtor's claimed
exemptions. |
NBRC-
0586 |
Warren W.
Bentz |
Bankruptcy Judge,
Western District of PA |
|
522(d)(10)(E) |
|
"There is a
disparity in the way private entrepreneurs are treated with respect to
their pension plans, or IRAs, as compared with persons who are employees
of larger corporations and have benefits under ERISA-qualified plans.
Nationwide a debtor's benefits under an ERISA-qualified plan is not
included in his estate under 11 U.S.C. § 541." In
the Third Circuit, a debtor is not entitled to an exemption with
respect
to his Keogh or IRA plan unless he is, at the moment of filing
bankruptcy,
receiving benefits from the plan. |
This disparity of
treatment should be revisited. |
NBRC-
0604 |
Richard H.
Walker |
General Counsel,
Securities and Exchange Commission |
Document entitled
"Issues
Identified by Division of Enforcement and Office of General Counsel
of Securities
and Exchange Commission for Consideration by Bankruptcy Review
Commission. |
522(b)(2)(A) |
|
Defendants in SEC
actions have filed bankruptcy to undermine asset freezes, stop law
enforcement actions and contempt proceedings, and to seek discharge of
nondischargeable claims. Author is transmitting with this letter a
document outlining issues of concern to the Division of Enforcement and
Office of General Counsel of the SEC, among which is the following:
States which authorize unlimited exemptions for homesteads open the
potential for abuse. |
Establish a
ceiling for the homestead exemption which applies uniformly to all
states. |
NBRC-
0605 |
Kenneth L.
Robinson |
President,
National Association of Federal Credit Unions (NAFCU) |
|
|
|
Lack of national
uniformity in exemptions leads to unfairness. While members agree with
the proposed homestead exemption, they feel it is too high. The $25,000
exemption for property which is not specifically exempted is too
high. |
Adopt uniform
national exemptions and do not let the states opt out. The ceiling on
the homestead exemption should be decreased to $75,000. Members support
a reasonable exemption for medical devices. Debtors should not be able
to completely shelter retirement accounts. Bodily injury payments should
be exempt for individuals who cannot work. The exemption for property
which is not specifically exempted should be lowered to
$10,000. |
NBRC-
0649 |
Elizabeth S.
Petersen |
Attorney |
|
|
|
With regard to
saving
homes, "often the debtor gets into trouble because the second
mortgage payments
are for a very short period of time and for a very high monthly
payment at
a very high interest rate. If we had the ability to modify the
second mortgage
to extend it, lower the interest rate, or do something else to make
the payments
lower, the plan would be feasible and many of the refilings about
which you
have been concerned would not occur." |
Allow the debtor
to modify the second or third mortgage on a residence if it is a
nonpurchase money lien. |
NBRC-
0652 |
Kenneth E.
Salomon |
Concerned
Citizen |
|
|
11 |
Author is in
favor of uniform exemptions, but feels the $40,000 - $100,000 ceiling is
too low. |
|
NBRC-
0658 |
Robert H.
Waldschmidt |
Attorney |
Copy of NABT
Poll |
|
|
NABT does not
oppose the
concept of Federal Exemptions. Trustees would have no objections to
a "cap" wih
no floor. |
|
NBRC-
0687 |
A. Stevens
Quigley |
Attorney, panel
Chapter 7 trustee |
|
|
|
|
"I support
inclusion of
IRA'a in exempt property, so as to bring certainty to the law. I am
worried
that a per household homestead will promote divorce." |
NBRC-
0694 |
James H.
Cossitt |
Attorney |
|
|
|
Author agrees
that present
exemption system has "introduced an enormous level of uncertainty
into the consumer bankruptcy system." With
regard to the Working Group proposals, why is a non-homeowning
debtor entitled
to only 1/2 of the homestead exemption Why should someone be able to
be forced
into the federal bankruptcy system by involuntary
bankruptcy |
Author agrees
that "the exemption should be stated in a single lump sum cash value
allowance rather than "paternalistic, predetermined categories."
Non-homeowners
should get the same exemption as homeowners. If someone is forced
into involuntary
bankruptcy they should be able to elect state or federal
exemptions. |
NBRC-
0703 |
Steven J.
Abelson |
Attorney |
|
|
|
Generally, the
Bankruptcy Code as it presently exists works reasonably well at
protecting debtors from what otherwise would be a life sentence of
unpaid bills, collection harassments and the absence of disposable
income from which to support even a minimum quality of life for
themselves and their families; however, the Code as it exists penalizes
many who need and deserve its protection the most. For instance, under
the current Code, those who have worked hard to pay down their mortgage
suffer the most, while those who mortgage their residence to the hilt
retain their homes without concern. |
"...I strongly
oppose the restrictive limits proposed for homestead exemptions. A
$100,000 ceiling can certainly be justified to protect the integrity of
the system, but a floor of $30,000 will do little to help those who the
Bankruptcy Code is designed to assist. I therefore respectfully propose
to the Commission that the Homestead Floor exemption revision for 11
U.S.C. §522(d)(1) be modified to no less than $50,000 and
preferably a uniform exemption of $100,000 per petition, irrespective of
individual or joint status. Alternatively, I would ask the Commission to
consider a "Senior Citizen Exception" in Chapter 13 which would allow
such individuals to fund their Chapter 13 plans for less than the full
liquidation value, simply on disposable income." Section
1322(a)(1) should be modified to permit debtors to retain a portion
of their
earnings for savings such as IRA's, 401(k)'s and the
like. |
NBRC-
0724 |
Louis A.
LeLaurin, III |
Attorney |
|
|
|
"The value of
property an individual may exempt under Texas law may and often does run
into the millions of dollars, permitting a debtor to emerge from
bankruptcy with a balance sheet free of debt and reflecting net worth of
seven figures....It is not unusual in my experience for debtors to move
to Texas one or two years prior to bankruptcy to take advantage of this
state's generous exemption laws." "The privilege of the shield of
bankruptcy is often abused to sanction the transfer of wealth from
unsophisticated small-busines credit grantors to conspicuous consumers
who seek bankruptcy protection while laughing at the unfortunate
creditors whose own lives and businesses may be ruined while their
wealthy debtors enjoy a "fresh start".
Egregious examples abound among former bank and savings and loan
executives. |
"I urge the
Commission to adopt uniform federal personal and real property
exemptions, with no state 'opt out' provisions, as part of its
recommendations for change in the statutes governing the area of
individual bankruptcy." 11 U.S.C. §522
should be amended to delete the option permitting a debtor to elect
state
exemptions. |
NBRC-
0727 |
Wendell J.
Sherk |
Attorney, Eric
Taylor & Associates,
P.C. |
|
|
|
Author discusses
the proposal
for uniform national exemptions and a single lump sum personal
exmeption
and the homestead exemption. Author seems to support these
proposals. He
feels that raising the amount for the homestead exemption would
amount to
inflation indexing from his state's exemption, which hasn't been
changed
in years. "The ability to transfer unused homestead exemptions to
personalty is critical to the entire picture." Although it may provide a
few with a "head start",
it is necessary. |
Adopt uniform
national exemptions. |
NBRC-
0728 |
John C.
Akard |
U.S. Bankruptcy
Judge, Northern District of Texas |
Copy of letter
dated 5/2/97 to Susan Jane Darnold from office of United States Trustee;
Copies of 4 letters dated 3/26/97 from Judge Akard to the Bankruptcy
Commissioners on different topics. |
|
|
By creating
uniformity
in exemptions at the national level, disuniformity will be created
at the
state level, meaning the neighbor who files bankruptcy will have
different
exemptions then the neighbor who is subject to state law. "The
uniform set
of exemptions will satisfy the rare, but highly publicized, cases.
It is
not clear whether the amounts stated in the exemptions represent the
debtor's
interest (equity) in the property or the market value." |
No specific
solution proposed. |
NBRC-
0730 |
Thomas C.
Leduc |
Director of
Regulatory Issues, Michigan Credit Union League |
|
|
|
"The Task Force
concurred
that one of the bigtest problems for creditors in the 1994
amendments to
the Bankruptcy Code was the doubling of personal exemptions allowed
for debtors." |
"The Task Force
recommends
that provision of the 1994 Bankruptcy Reform Act be
repealed." |
NBRC-
0776 |
Keith
Hilliard |
Individual |
|
|
11 |
"Florida is
probably the
worst state for enabling petitioners to claim bankruptcy, dismiss
their debts,
and have millions of dollars in assets." |
"I live in
Florida and
am very interested in seeing a national cap placed on the amount of
property
and possesions that an individual could claim." |
NBRC-
0787 |
Bart
DeCamp |
VP-Lending,
School Employees Credit Union Clark County |
|
|
|
Author feels that
the
lack of penalty or social stigma encourages bankruptcy filings.
"Debts simply
disappear. Many petitioners exhibit sufficient income to repay debts
or have
equity exempted that could be used. Any proposal to increase the
homestead
exemption further excalates the peceived lack of penalty. Friends
and family
recommend bankruptcy as an 'easy solution'." |
Do not increase
the homestead exemption. |
NBRC-
0806 |
Jill M.
Sturtevant |
Assistant General
Counsel, Bank of America |
|
|
|
The Commission's
proposed
exemption amounts are too generous. The NBRC proposal "fails to
address the fundamental flaw of the current bankruptcy system, the fact
that employed debtors who have the ability to pay a portion of their
obligations are not incented to pa
|