Please review my exemptions - trustee didn't liek my auto exemption

[tazunemono]

At my 341 hearing, the trustee objected to my use of 11 USC sec 522(d)(2) to exempt $6,516 in value for my 2006 Jeep Liberty

Cash on Hand
11 USC sec 522 (d)(5) and 11 USC sec 522 (d)(1) for $2,254 in cash
Security deposits
11 USC sec 522(a)(3)(c) for $750
Household goods and furnishings
11 USC sec 522(d)(3) for $1,250
Books, pictures, etc.
11 USC sec 522 (d)(6) for $502
Wearing Apparel, clothing, etc
11 USC sec 522 (d)(3) for $500
Jewlery
11 USC sec 522 (d)(4) for $50
Sports Equipment
11 USC sec 522(a)(3)(c) for $200
401(k) fund
11 USC sec 522(b)(3)(c) and 11 USC(d)(11)(e) for $1,442
Automobiles
11 USC sec 522(d)(2) for $6,516 in column 3 AND column 4...should column 3 only list the exempted amount ($3,225)? The remainder is completely financed by me thru CarMax
2012 Tax Return
11 USC sec 522(d) for $1,200

Where did I go wrong?

[tazunemono]

I am confused - several sources say use "fair market value' in the last column 'current value of property without deducting exemption' which should match the Scheudle B exactly....in this case, the value would be $6,516 with a Federal examption of $3,250

Others say the value of the property on Schedule C is the same value as on Schedule B, except you subtact the value of the lien against the property. This would result in a value of $1,200 (determined by Kelly Blue Book value of $7,716 - lien amount of $6,516) with a Federal exemption of $3,250


Which is correct?

Moderator edit: Proposed listing on Schedule C from other thread:

OK, so on Schedule C - Property Claimed as Exempt

Using 11 USC sec 522 (d)(2) I get $2,950 in exemptions. My 2006 Jeep Liberty has a KBB value of $7,500 and I owe $6,500. Thus, I have $1,000 in equity in the car. So, on Schedule C, this is what I plan to put, is it correct:

Specify Law: 11 USC sec 522 (d)(2)
Value of Claimed Exemption: $2,950 (the maximum exemption)
Current Value of Propoerty without deducting exemption: $1,000Is this correct? If the value in the last column were more than $2,950 the trustee would have to sell it...but I'm financed and owe quite a bit, so this won't happen.

[LadyInTheRed]

What you plan to put on Schedule C seems okay to me. But, I don't think you have the maximum exemption correct. Federal Exemptions are adjusted every 3 years in April. According to Nolo, which tends to stay up to date, the last adjustment was in 2010 and the auto exemption was increaed to $3,450. But, I don't think claiming less than the maximum would be an issue as long as you've exempted all of your equity. Claiming the max protects you in case the trustee disputes the value.

[LadyInTheRed]

Here's tazunemomo's reply to my post above. He was posting in another thread while I was trying to move and merge threads.

I don't think you have the maximum exemption correct. Federal Exemptions are adjusted every 3 years in April. increaed to $3,450. But, I don't think claiming less than the maximum would be an issue as long as you've exempted all of your equity. Claiming the max protects you in case the trustee disputes the value.

Thanks I will claim the maximum exemption of $3,450. For the last column, I put in $1,000 (the KBB value of the car - the lien amount). So, I am covered! I believe the trustee was objecting to my original exemption $ figure, which was very high. Now that it's fixed, I just need to re-file the amended Schedule C with the clerk and serve the trustee with it. I found a template for this online.

[justbroke]

I would always apply the maximum just in case the valuation is wrong (too low). As for which value to list, you always list the actual market value. I don't know why there are differences in what people are saying. If your vehicle is encumbered by a loan/lease/note, then you list that on Schedule D for secured claims against that property. That is how the Trustee and others know that it is encumbered.

I can see why there are differences because some believe that Schedule C is all about what interest you have in the property that is exempt. That is true, but the property value is the un-encumbered value... the current market value.

[tazunemono]

I would always apply the maximum just in case the valuation is wrong (too low). As for which value to list, you always list the actual market value. I don't know why there are differences in what people are saying. If your vehicle is encumbered by a loan/lease/note, then you list that on Schedule D for secured claims against that property. That is how the Trustee and others know that it is encumbered.

I can see why there are differences because some believe that Schedule C is all about what interest you have in the property that is exempt. That is true, but the property value is the un-encumbered value... the current market value.

Well I went ahead and claimed the max exemption and put my "actual" value as the fair market value - lienholder claim, as below:

AMENDED SCHEDULE C – PROPERTY CLAIMED AS EXEMPT
CORRECTED: Value of claimed exemption, for 2006 Jeep Liberty, from $6,516.13 to $3,450 [maximum allowed by 11 U.S.C. § 522(d)(2)]; and,
CORRECTED: Current value of property without deducting exemption, from $6,516.13 to $1,270.87 [changed to current value of debtor’s equity in vehicle ($7,787) minus the lienholder’s interest in vehicle ($6,516)].