Means Test and Secured Debt Questions

[anonymuse]

He asked me how i came up with a figure of $9100 for exemption on my car. I said $3500 for automobile, $5000 for unused homestead exemption and $600 for wildcard.

You took unused exemptions from one area and applied them for larger exemptions in another? Is this normal, or just particular to your state?

[SinkingFast]

Depends on the wording of the Statute, Anon.

Some States only allow you to use the Homestead Exemption on your house. Other States word that Statutes so that if you don't use the Homestead Exemption to protect a residence, it can be used as a Wild Card elsewhere. Wild Cards can be used any way the filer wants.

[aa06a47]

I don't believe you can use your unused homestead exemption, and that is probably why the trustee is objecting.

[SinkingFast]

I don't believe you can use your unused homestead exemption, and that is probably why the trustee is objecting.

Could be, Aa.

Or Kristin could be from a State that allows the Homestead Exemption to be used as a Wild Card, and is filing in a State that does not allow that type of use.

Maybe Kristin will post the States so we can check.

[aa06a47]

I believe she hails from the great state of Colorado

http://www.bankruptcyinformation.com/CO_exemp.htm

This link even states there is no wild card for CO. Am not sure if the link is up to date.

[anonymuse]

I believe she hails from the great state of Colorado

http://www.bankruptcyinformation.com/CO_exemp.htm

This link even states there is no wild card for CO. Am not sure if the link is up to date.

That's not up-to-date for Colorado--the homestead exemption is now $45,000. Not sure of the accuracy of the rest.

For current exemptions (the full legalese)

http://198.187.128.12/colorado/lpext.dll/Infobase4/1e595/20f9f/211fe?f=templates&fn=document-frame.htm&2.0#JD_t13art54

13-54-102. Property exempt.

http://198.187.128.12/colorado/lpext.dll/Infobase4/1e595/20f9f/211fe/2121d?f=templates&fn=document-frame.htm&2.0#JD_13-54-102

13-54-107. Exemptions in bankruptcy.

http://198.187.128.12/colorado/lpext.dll/Infobase4/1e595/20f9f/211fe/2130a?f=templates&fn=document-frame.htm&2.0#JD_13-54-107

38-41-201. Homestead exemption.

http://198.187.128.12/colorado/lpext.dll/Infobase4/59e51/5b857/5cfc8/5cfca/5d1ec/5d1ef?f=templates&fn=document-frame.htm&2.0#JD_38-41-201

The Colorado BK Court doesn't provide any layman's summary (at least that I can find).

http://www.cob.uscourts.gov/default.asp

[SinkingFast]

Yep, that's it. The application of the Homestead Exemption on the car.

As written, from the Link provided by Anon, Colorado does not allow the Homestead exemption to be carried over as a Wild Card if not used to protect a residence.

But that should be easily fixed, Kristin. Just be prepared to negotiate with the Trustee to "Buy Back" the car.

There was another Pro Se filer who did something similar. Didn't apply their Exemptions properly. It resulted in a $7K difference. The Trustee threatened to take a car and sell it. The Judge said, "You really think you can get that much for the car?" Trustee said Yep. Judge excused himself for a few to take a break and let them discuss it. Trustee wheels to the Pro Se filers and says, "How's $3K sound to you guys. You can borrow it from friends or family. Pay in payments. I don't care where the money comes from." They agreed, Judge came back in, and the Trustee said, "The matter is settled, Your Honor."

Your at a $5K difference. Just be prepared to negotiate with the Trustee. Not saying the Trustee will offer it, but it might happen. The Trustee has to be sure that your car is gonna bring at least the correctly applied exemptions, $4100 in your case, plus costs to sell. Because the Trustee has to pay you $4100 right off the top for your Exemptions.

[kristineco]

Out of State Exemptions

I live in Colorado but am using Georgia's exemptions. I haven't lived in CO for 2yrs so I have to use Georgia Exemptions by new law code 522. Ga Exemptions are $10,000 for homestead of which you can use $5000
to exempt any other property if you don't use the homestead exemption. Also GA vehicle exemption is $3500 and there is a $600 wild card you can use anywhere. So I have a car that is worth about $10000 and this gets me to $9100.

Kris

[anonymuse]

I'm finding it very interesting reading the exact laws plus the law reviews on them.

For instance:

Spirit of homestead laws preserves right of occupancy. The spirit and the letter of our homestead laws preserve a right of occupancy for those who stand in the relation of head of the family. In re Wallace's Estate, 125 Colo. 584, 246 P.2d 894 (1952).

Two governing principles underlie all homestead legislation: First, the beneficient design of protecting the citizen householder and his family from the dangers and miseries of destitution consequent upon business reverses or upon calamities from other causes; and, second, the sound public policy of securing the permanent habitation of the family, and cultivating the local interest, pride, and affection of the individual, so essential to the stability and prosperity of a government. Weare v. Johnson, 20 Colo. 363, 38 P. 374 (1894); Barnett v. Knight, 7 Colo. 365, 3 P. 747 (1884).

Exemption statutes are to be liberally construed, so as to promote the humane policy of such legislation, but the courts cannot by construction annex to such statutes consequences not fairly within their purview or intent. Barnett v. Knight, 7 Colo. 365, 3 P. 747 (1884); McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420 (1887); Martin v. Bond, 14 Colo. 466, 24 P. 326 (1890); Weil v. Nevitt, 18 Colo. 10, 31 P. 487 (1892); Wright v. Whittick, 18 Colo. 54, 31 P. 490 (1892); Brooks v. Black, 22 Colo. App. 49, 123 P. 131 (1912); Haas v. De Laney, 165 F. Supp. 488 (D. Colo. 1958).

I hope the "spirit of the law" helps the homeowner out if they're borderline on the homestead exemption.

I'm just wondering if lawyers will make you go Ch 13 when you're borderline since they are afraid of a fine if Ch 7 is converted to Ch 13.