Tag Archive for Bankruptcy Exemptions

Bankruptcy: The Mechanics of Exemptions and Related Issues

Bankruptcy: The Mechanics of Exemptions and Related Issues

Most bankruptcy attorneys have a basic level of understanding of the how exemptions work.  At a very broad level, a claim of exemptions removes property of a consumer debtor (note that business debtors are not afforded exemptions) from the bankruptcy estate and thereby serves as a foundation for the “fresh start” that bankruptcy is designed to provide.

But I suspect that even seasoned bankruptcy attorneys – including myself – lack a detailed understanding of many of the nuances of the mechanics of exemptions unless they’ve been faced with issues related to the claiming of exemptions.  A recent case has prompted a “back to the basics” look at the mechanics of exemptions.

Read More

Written by | Posted in Bankruptcy Exemptions

Bankruptcy Exemptions, Pension Plans, And Section 409A

Bankruptcy Exemptions, Pension Plans, And Section 409A

This post covers the recent case of In re O’Malley, 127 AFTR 2d 2021-XXXX (DC IL) (March 2, 2021).

In this case, the Debtor failed to disclose a retirement plan in his initial bankruptcy schedules in a case originally filed in March, 2013.  At the creditor meeting, the Debtor disclosed the existence of an interest in a MetLife defined benefit pension plan, and committed to amending his schedules to include that interest.  Subsequently, the Debtor did in fact amend his schedules to list a single “Met Life Defined Benefit Pension Plan” of “Unknown” value and proceeded to claim 100% of its value as exempt from the estate under an Illinois law that protects pension benefits.  Following the conclusion of the creditor meeting, neither the Trustee nor any creditor objected to the exemption claimed by Mr. O’Malley for the pension plan disclosed in the amended schedules.

Read More

Written by | Posted in Bankruptcy Exemptions • Pension Plans • Section 409A