Exemptions Denied

[Atlanta7]

In the fraudulent chapter-7 case, if the BKC denies the discharge and the trustee administer the case to liquidate assets, does BKC or trustee also have powers to deny exemption due to fraud and liquidate all assets?

[justbroke]

I don't know your true underlying question. If you're asking if exemptions can be denied... absolutely. When there is no basis for the exemption the panel trustee will object even in non-fraud cases. I don't think, however, that you can be denied an exemption simply due to bankruptcy fraud. Now if the asset was fraudulently obtained or obtained using fraudulently obtained money... that's another question that I can't answer.

Bottom line is to avoid bankruptcy fraud at all costs. It is a crime and the courts are not shy about sending people to federal prison to make a point.

[despritfreya]

. . . I don't think, however, that you can be denied an exemption simply due to bankruptcy fraud.

See:

Law v. Siegel, 571 U.S. 415 (2014)

https://www.supremecourt.gov/opinions/boundvolumes/571BV.pdf

Skip to page 415.

Des.

[Atlanta7]

Thank you!

[justbroke]

I've read Siegel once before and, admittedly, not closely. Did I misread it or did SCOTUS say that the court can't touch the exemptions regardless... even though they (Law) tried to get around it by surcharging the exemption to pay a debt? (Not to hijack the thread at all... just curious.)

[despritfreya]

My reading of the case. . .

An allowed exemption is sacrosanct.

Des.

[justbroke]

My reading of the case. . .

An allowed exemption is sacrosanct.

I didn't use such a flowery word as sacrosanct... but I use "no touchie!" I appreciate the qualifying adjective, "allowed."